ANNUAL REPORT 2016
Precot Meridian Limited
Directors
Sumanth Ramamurthi
A Ramkrishna
Jairam Varadaraj
Vijay Venkatasamy
C N Srivatsan
Suresh Jagannathan
R Bhuvaneshwari
Chairman D Sarath Chandran
Vice Chairman and Managing Director Ashwin Chandran
Joint Managing Director Prashanth Chandran
Chief Financial Officer M R Siva Shankar
Company Secretary
Statutory Auditors Haribhakti & Co. LLP, Coimbatore
Registered Office SUPREM,
No. 737 Green Fields,
Puliakulam Road,
Coimbatore - 641045.
Email : [email protected]
Website : www.precot.com
CIN : L17111TZ1962PLC001183
Registrar and Share transfer agent Link Intime India Pvt Limited,
Surya , 35, Mayflower Avenue,
Senthil Nagar, Sowripalayam Road,
Coimbatore - 641028.
E-mail : [email protected]
Vijay Mohan
R Nithya Prabhu
Contents Page
Directors Report 2
Report on Corporate Governance 17
Auditors Report 30
Balance Sheet 34
Statement of Profit and Loss 35
Notes on Financial Statements 36
Cash Flow Statement 54
Consolidated Financial Statements 58
Notice to Members 74
1
Dear Shareholders,
The state of affairs of the company
Particulars 31.03.2016 31.03.2015
thYour directors hereby present the 54 Annual Report of your
company along with the financial results for the year ended st
31 March 2016.
Revenue from operations 68369 74695
PBIDT 2859 2088
Less : Finance cost 3765 3362
Profit from Operations (906) (1274)
Other income 1100 248
PBDT 194 (1026)
Depreciation 3800 3692
PBT (Before Exceptional Item) (3606) (4718)
Exceptional Item (1945) 1473
PBT (After Exceptional Item) (5551) (3245)
Deferred Tax - 19
Profit after Tax (5551) (3264)
Add : Balance brought forward (3433) (141)
Less : Transfer to General Reserve - -
Less : Depreciation as per transition
provision in Note 7(b) of - (28)
Companies Act, 2013
Less : Provision for proposed dividend
(including dividend tax) - -
Balance carried forward (8984) (3433)
a. Financial results (` Lacs)
Directors Report and Management Analysis
Economic overview and Industry review
While the global economy continued to remain under stress, the Indian economic growth has been uneven owing to dwindling fresh capital investments, bad loans in the banking sector and subdued exports due to weak global economy. The IMF growth percentile indicators do not put the global economic growth in a positive light for the immediate succeeding year.
Given the current situation of the world economy, the Indian growth forecast could be challenging, especially for the textile industry. At a time when the Indian spinning segment is struggling to maintain its profitability, the TUFS scheme which played a supportive role in the modernization of the textile units has been replaced with a new TUFS scheme which has not considered the spinning industry favourably.
Outlook for the current year
Though IMF projects a 7.3% Indian GDP growth rate for the current fiscal, the recovery is anticipated to be sluggish. Growth in domestic demand could be a key source for improved performance. Improved asset quality of banks would provide the thrust for the capital investment growth which would aid the revival of our economy.
The cotton arrivals for the 2015-16 season is projected to be around 340 lakh bales and the carry over stock is likely to be lower than that of the previous year level. The arrivals which is down by 12%, as compared to the previous year, is an indicator of rising cotton prices which could further strain the margin levels of the spinning industry.
Your company has taken several measures to improve productivity, cut costs and change the product mix to improve the margins in the spinning division. Notwithstanding the global economic slowdown, the turnover, in the technical
textiles division, for the FY 2015-16 has grown to ` 49 crores
as against 28 crores during FY 2014-15. Your company is in
pursuit of newer markets to increase the capacity utilization which will reduce the costs in the short run and yield higher margins.
Opportunities, Threats, Risks and Concerns
The Indian textile industry is expected to grow significantly in the next five years and reach around USD 220 billion. With higher disposable income in the hands of the younger generation, the probability of a pickup in the domestic consumption is more likely. The slowdown of the Chinese economy could be an opportunity that is available to the Indian textile exporters. On a long term basis, the demand from China for cotton yarn is expected to rise once their low cost raw cotton stocks are done away with.
The fragmented Indian textile industry has built up surplus capacity leading to higher supplies at a time when the demand is weakening. The export market is highly dependent on the revival of the global economy which as of now seems to take a longer time.
Interest subsidy, which was available till now for the yarn spinning industry, has now been withdrawn which will push up
b. Dividend and transfer to reserves
Since this year's operations have resulted in a net loss, your directors have decided not to declare any dividend. No amount is proposed to be transferred to reserves.
Review of operations
The spinning industry has been witnessing a consistent drop in yarn prices quarter on quarter. Your company's yarn prices have dipped by around 8% in the current fiscal in comparison with that of the last year. Your company has achieved a
turnover of ` 684 crores which is lower by ` 63 crores
compared to the previous year, which is on account of proportionate drop in yarn prices.
The spinning division has shown improvement at cash profit level while the margins of technical textiles division continue to be stressed in spite of its improved turnover. The Central Government has not cleared release of TUFS on a set of applications filed by a number of textile units. TUF subsidy for
the period 2012-13 to 2014-15 amounting to ` 1945 lacs,
accounted on accrual basis, together with foreign currency
fluctuation of ` 1155 lacs has been provided for in the
statement of profit and loss and are non-cash expenditure in the current year.
2
Directors Report and Management Analysis
Mr D Sarath Chandran is not liable to retire by rotation.Mr Vijay Mohan, Mr Ashwin Chandran and Mr Prashanth Chandran are liable to retire by rotation as per the provisions of section 152(6) of the Act.
Mr Ashwin Chandran retires by rotation at the ensuing Annual General Meeting. He is eligible for re-appointment.
The details of remuneration paid during the year are provided in the corporate governance report. The following are the whole-time key managerial personnel of the company as per section 203 of the Act (i) Mr. Ashwin Chandran, Vice Chairman and Managing Director (ii) Mr. M R Siva Shankar, Chief Financial Officer, and (iii) Mr. R Nithya Prabhu, Company Secretary. There has been no change in the key managerial personnel during the year.
Performance Evaluation
Pursuant to the provisions of the Act and the corporate governance requirements as per SEBI lisiting regulations, the board had evaluated its own performance, the directors individually and also the working of its committees.
The performance of the board was evaluated by the board of directors after seeking inputs from all the directors on the basis of the criteria such as board composition and structure, effectiveness of board process etc.
The performance evaluation of each director was done by the entire board of directors, excluding the director being evaluated, taking into consideration inputs received from the other directors, covering various aspects of the board's functioning such as active participation and contribution during discussions, effective deployment of knowledge and expertise towards the growth and betterment of the company, impact and influence on the growth of the company and performance of specific duties, obligations and governance.
The performance of the committees were evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of the committees, effectiveness of committee meetings etc.
Performance of the non-independent directors, performance of the board as a whole and performance of the chairman were evaluated during the separate meeting of independent directors after taking into account the views of executive directors and non executive directors.
Policy on director s appointment and remuneration and other details
The company s policy on directors appointment and remuneration and other matters provided in section 178 (3) of the Act has been disclosed in the corporate governance report, which forms part of this report.
Auditors report and secretarial auditors report
The auditors report and secretarial auditors report does not contain any qualifications, reservations or adverse remarks.
There were no instances of frauds identified or reported by the
the interest cost leading to erosion of margin to that extent. Availability of trained manpower is difficult and therefore the training time and cost involved would increase the cost.
Personnel
The company continues to maintain good relations with its labour across its units. The exercise of recruiting, training and deployment of trained labour, at added cost, continues in view of the shortage that has been persistent in Tamil Nadu. The company has 1384 permanent employees on the roll as on 31-Mar-2016.
Internal control systems & Risk Management
The company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed, by the audit committee of the board, for identification of deficiencies and necessary timely actions are taken to improve the controls at all levels. The committee also reviews the statutory auditors' report, key issues, significant processes and accounting policies.
Risk Management is an integral part of the business process. The company has constituted a Risk Management Committee and adopted a policy on risk management, for identifying and managing risk. The audit committee of the board reviews the risk management report periodically. The details about composition of the risk management committee, policy and its terms of reference have been provided in the corporate governance report.
Number of meetings of the board
Details of number of meetings of the board and committees thereof and the attendance particulars of the directors in such meetings are provided under the corporate governance report attached to this report.
Directors and Key Managerial Personnel
The independent directors have submitted their disclosures to the board stating that they fulfill the requirements enumerated under section 149 (6) of the Companies Act, 2013 (hereinafter the Act ), so as to qualify themselves to be appointed as
independent directors under the provisions of the Act and relevant rules. There is no resignation or reappointment of independent director during the year under review.
Mr A Ramkrishna, independent director retires from the company on 31-May-2016 on completion of his tenure. He has been associated with the company for more than 35 years holding various managerial positions. He was inducted as executive director in the board of the company on 27-Mar-1998. The directors placed on record their sincere appreciation for the valuable contributions made byMr A Ramkrishna during his tenure.
Mr D Sarath Chandran, Chairman, Mr Ashwin Chandran, Vice Chairman & Managing Director and Mr Prashanth Chandran, Joint Managing Director of the company have been appointed for a term of three years effective from 01-Apr-2014.
3
statutory auditors during the course of their audit for the period under review.
The report of the secretarial auditor is furnished as Annexure A and forms part of this report.
Receipt of any commission by MD/WTD from company as receipt of commission / remuneration from subsidiary
MD/WTD are not in receipt of any commission from company or any commission / remuneration from subsidiaries during the year under review.
Annual Return
The extract of annual return pursuant to section 92 read with rule 12 of the Companies (Management and Administration) Rules, 2014, in form MGT 9 is furnished as Annexure B to this report.
Particulars of Employees
The particulars as required under rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is in Annexure C.
Subsidiary companies
Your company has three wholly owned subsidiaries,1. Suprem Textile Processing Limited, 2. Multiflora Processing Coimbatore Limited, 3. Precot Meridian Energy Limited. These companies are into textile, processing and power segment activities, respectively. There has been no change in the nature of the business of the subsidiaries during the year under review. The subsidiary companies have no operations during the year under review and had insignificant net loss for the year.
The consolidated financial results incorporating the financial statements of the above wholly owned subsidiaries is attached to the annual report as required under the accounting standard and the listing regulations. The statement pursuant to section 129 (3) of the Act, containing the salient features of the financial statements of subsidiary companies, forms part of this annual report.
Pursuant to section 136 of the Act, the financial statements of the company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the company.
The company does not have any material subsidiary whose net worth exceeds 20% of the consolidated net worth of the holding company in the immediately preceding financial year or has generated 20% of the consolidated income of the company during the previous financial year. The board has approved a policy for determining material subsidiaries which is available on the company's website http://www.precot.com/ investor-relations/.
The annual accounts of the subsidiary companies are kept for inspection by the shareholders at the registered office of the company. The company shall provide the copy of the annual accounts of subsidiary companies to the shareholders upon
their request. The company does not have any associate or joint venture.
Audit Committee
The company has constituted audit committee as per section 177 of the Act and listing regulations. The details pertaining to vigil mechanism, composition and terms of reference of audit committee are included in the corporate governance report, which forms part of this report.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The details as required under section 134(3)(m) of the Act read with rule 8 of the Companies (Accounts) Rules, 2014, is in Annexure D.
Corporate Governance
A report on corporate governance is furnished as Annexure E and forms part of this report. This includes other disclosures as required under the provisions of the Act. The company has complied with the conditions relating to corporate governance as stipulated in regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter Listing Regulations ).
Corporate Social Responsibility (CSR)
The CSR policy deals with allocation of funds, activities, identification of programmes, approval, implementation, monitoring and reporting.
For the FY 2015-16, the company is not required to spend on CSR activities because of the average net loss for the immediately preceding three financial years, as computed under the provisions of the Act. CSR report pursuant to rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is in Annexure F.
The disclosures as required under section 135 (4) (a) of the Act are given in the CSR report.
The board has approved a CSR policy, which is available on the company's website http://www.precot.com/investor-relations/.
Particulars of Loan, Guarantees and Investments
The particulars of loans, guarantees and investments are given under notes to financial statements.
Related Party Transactions
All transactions entered into with related parties as defined under the Act and listing regulations during FY 15-16 were in the ordinary course of business and on an arm's length pricing basis. Therefore it does not attract the provisions of section 188 of the Act, and also there are no material contracts or arrangement or transactions and thus disclosure in form AOC-2 is not required.
The board has approved a policy for related party transactions which is avai lable on the company's websi te http://www.precot.com/investor-relations/.
Directors Report and Management Analysis
4
Directors' responsibility statement
The board of directors, to the best of their knowledge and ability, confirm that :
a) The applicable accounting standards have been followed
and proper explanations provided relating to material departures, if any
b) The company has adopted prudent and consistent accounting policies so as to give a true and fair view of the state of affairs of the company
c) Proper and sufficient care has been taken for maintenance of adequate accounting records under the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities
d) The annual accounts of the company have been prepared on a going concern basis
e) The internal financial controls are adequate and are operating effectively
f) A proper system for ensuring compliance of all the applicable laws are put in place and are operating effectively
Statutory Auditors
The auditors, M/s Haribhakti & Co. LLP, pursuant to the provisions of section 139 of the Act, were appointed as statutory auditors of the company from the conclusion of the
rd th53 AGM till the conclusion of the 58 AGM to be held in the year 2020, subject to ratification by members at every AGM.
The appointment of M/s Haribhakti & Co. LLP is included as Item No. 3 of the AGM notice for ratification. The company has received consent and confirmation from M/s Haribhakti & Co. LLP that, if appointed, it would be within the limits under the provisions of the Act.
Cost Auditor
Pursuant to section 148 of the Act, read with the Companies (Cost Records and Audit) Rules 2014, the board of directors, on the recommendation of the audit committee, appointed Mr R Krishnan, Cost Accountant, as the cost auditor of the company for the FY 2016 - 17.
Accordingly, a resolution seeking member's ratification for the remuneration payable to Mr R Krishnan, Cost Auditor is included as Item No. 4 of the AGM notice.
Change in nature of business
The company is primarily engaged in the business of textiles. There was no change in the nature of the business of the company and its subsidiaries during the year under review.
Fixed Deposits
During the year the company did not accept or renew any fixed deposit and no fixed deposit remained unclaimed with the company as on 31-Mar-2016.
Material Changes
No material changes or commitments affecting the financial position of the company occurred between the end of the financial year as on 31-Mar-2016 and the date of this report.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The company has constituted an internal complaints committee to address the complaints regarding sexual harassment. All employees are covered under this policy. The company has not received any such complaints during the year under review.
Unclaimed Shares
In accordance with the requirement of Regulation 34(3) and Schedule V Part F of listing regulations, the company reports the following details in respect of equity shares lying in the suspense account.
Directors Report and Management Analysis
Particulars
Numberof
shareholders
Numberof
EquityShares
Aggregate number of shareholders
and the outstanding shares in the
suspense account lying as on
01-Apr-2015
N u m b e r o f s h a r e h o l d e r s
approached the company for
transfer of shares from suspense
account during the year
Number of shareholders to whom
shares were transferred from
suspense account during the year
Aggregate number of shareholders
and outstanding shares in the
suspense account lying as on
31-Mar-2016
422 75875
4 725
4 725
418 75150
The voting rights on the shares outstanding in the suspense
account as on 31-Mar-2016 shall remain frozen till the rightful
owner of such shares claims the shares.
Acknowledgment
Your directors thank the shareholders, customers, suppliers
and bankers for their continued support during the year. Your
directors also place on record their appreciation of the
contributions made by employees at all levels towards the
growth of the company.
Coimbatore28-May-2016
By order of the board
D Sarath Chandran
Chairman
5
ANNEXURE A
FORM MR 3
SECRETARIAL AUDIT REPORT
stFor the financial year ended 31 March, 2016
[Pursuant to Section 204(1) of the Companies Act, 2013
and rule No.9 of the Companies (Appointment and
Remuneration Personnel) Rules, 2014]
To
The Members,
Precot Meridian Limited
I have conducted the secretarial audit of the
compliance of applicable statutory provisions and the
adherence to good corporate practices by Precot
Meridian Limited (hereinafter called the company ).
Secretarial Audit was conducted in a manner that
provided me a reasonable basis for evaluating the
corporate conducts/statutory compliances and
expressing my opinion thereon.
Based on my verification of the company's books,
papers, minute books, forms and returns filed and
other records maintained by the company and also the
information provided by the company, its officers,
agents and authorized representatives during the
conduct of secretarial audit, I hereby report that in my
opinion, the company has, during the audit period st
covering the financial year ended on 31 March 2016
complied with the statutory provisions listed hereunder
and also that the company has proper board-
processes and compliance-mechanism in place to the
extent, in the manner and subject to the reporting made
hereinafter:
I have examined the books, papers, minute books,
forms and returns filed and other records maintained st
by the company for the financial year ended on 31
March 2016 according to the provisions of:
i) The Companies Act, 2013 (the Act) and the rules
made there under;
ii) The Securities Contracts (Regulation) Act, 1956
('SCRA') and the rules made there under;
iii) The Depositories Act, 1996 and the Regulations
and Bye-laws framed there under;
iv) Foreign Exchange Management Act, 1999 and
the rules and regulations made there under to the
extent of Foreign Direct Investment, Overseas
Direct Investment and External Commercial
Borrowings;
v) The following regulations and guidelines
prescribed under the Securities and Exchange
Board of India Act, 1992 ('SEBI Act'):
a) The Securities and Exchange Board of
India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011;
b) The Securities and Exchange Board of
India (Prohibition of Insider Trading)
Regulations, 1992 and Securities and
Exchange Board of India (Prohibition of
Insider Trading) Regulations, 2015;
c) The Securities and Exchange Board of
India (Issue of Capital and Disclosure
Requirements) Regulations, 2009;
d) The Securities and Exchange Board of
India (Employee Stock Option Scheme and
Employee Stock Purchase Scheme)
Guidelines, 1999;
e) The Securities and Exchange Board of
India (Issue and Listing of Debt Securities)
Regulations, 2008;
f) The Securities and Exchange Board of
India (Registrars to an Issue and Share
Transfer Agents) Regulations, 1993
regarding the Companies Act and dealing
with client;
g) The Securities and Exchange Board of
India (Delisting of Equity Shares)
Regulations, 2009; and
h) The Securities and Exchange Board of
India (Buyback of Securities) Regulations,
1998;
vi) In relation to the law and regulations as specifi-
cally applicable to the company, we have relied
on the representation made by the company and
its officers for system and mechanism formed by
the company for compliance under other
applicable Acts, laws and regulations as
applicable to the company.
Directors Report and Management Analysis
6
I have also examined compliance with the applicable
clauses of the following :
i) Secretarial Standards issued by The Institute of
Company Secretaries of India.
ii) The Listing Agreements entered into by the
company with National Stock Exchange of India
Limited and the Securities and Exchange Board of
India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
During the period under review the Company has
complied with the provisions of the Act, Rules,
Regulations, Guidelines, Standards, etc. mentioned
above.
I further report that
The board of directors of the company is duly
constituted with proper balance of Executive Directors,
Non-Executive Directors and Independent Directors.
The changes in the composition of the board of
directors that took place during the period under review
were carried out in compliance with the provisions of
the Act.
Adequate notice is given to all directors to schedule the
board meetings, agenda and detailed notes on agenda
were sent at least seven days in advance, and a
system exists for seeking and obtaining further
information and clarifications on the agenda items
before the meeting and for meaningful participation at
the meeting.
All decisions of the board and committees were
unanimous and the same was captured and recorded
as part of the minutes and hence no dissent is recorded
in minutes, however, we have been represented that
dissent, if any, are captured and recorded as part of the
minutes.
I further report that there are adequate systems and
processes in the company commensurate with the size
and operations of the company to monitor and ensure
compliance with applicable laws, rules, regulations
and guidelines.
Annexure A
To
The Members,
Precot Meridian Limited
Our Secretarial Audit Report of even date is to be read
along with this letter.
Maintenance of secretarial record is the responsibility
of the management of the company. Our responsibility
is to express an opinion on these secretarial records
based on our audit.
We have followed the audit practices and process as
were appropriate to obtain reasonable assurance
about the correctness of the contents of the secretarial
records. The verification was done on test basis to
ensure that correct facts are reflected in secretarial
records. We believe that the processes and practices
we followed provide a reasonable basis for our opinion.
We have not verified the correctness and
appropriateness of financial records and books of
accounts of the company.
Wherever required, we have obtained the
management representation about the compliance of
laws, rules and regulations and happening of events
etc.
The compliance of the provisions of corporate and
other applicable laws, rules, regulations, standards is
the responsibility of management. Our examination
was limited to the verification of procedure on test
basis.
The Secretarial Audit Report is neither an assurance
as to the future viability of the company nor of the
efficacy or effectiveness with which the management
has conducted the affairs of the company.
Gouri Shanker Mishra
FCS No. 6906
C P No. : 13581
Gouri Shanker Mishra
FCS No. 6906
C P No. : 13581
Note : This report is to be read with our letter of even
date which is annexed as an annexure and forms an
integral part of this report.
Directors Report and Management Analysis
Chennai23-May-2016
Chennai23-May-2016
7
ANNEXURE B
FORM NO. MGT-9
EXTRACT OF ANNUAL RETURN
stas on the financial year ended on 31 March, 2016.
[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies(Management and Administration) Rules, 2014]
I. Registration and other details
i) CIN L17111TZ1962PLC001183
ii) Registration date 02-Jun-1962
iii) Name of the company Precot Meridian Limited
iv) Category / Sub-category of the company Public limited company having share capital
v) Address of the registered office and contact details SUPREM, No. 737, Green fields,
Puliakulam Road, Coimbatore - 641 045
Tel: 0422-4321100 Fax: 0422 - 4321200
Email : [email protected]
Website : www.precot.com
vi) Whether listed company Yes
vii) Name, address and contact details of registrar Link Intime India Private Limited, and transfer agent, if any Coimbatore Branch,
"Surya", 35, Mayflower Avenue,
Senthil Nagar, Sowripalayam Road,
Coimbatore - 641 028.
Email : [email protected]
Phone : 0422 - 2314792
II. Principal business activities of the company
All the business activities contributing 10 % or more of the total turnover of the company shall be stated :-
1 Cotton yarn 13111 77%
S.No.Name and description ofmain products / services
NIC code of theproduct / service
% to total turnoverof the company
III. Particulars of holding, subsidiary and associate companies -
1. Precot Meridian Energy Limited
SUPREM, No. 737, Green fields U17111TZ2002PLC010408 Subsidiary 100 2(87)
Puliakulam Road, Coimbatore - 641 045
2. Suprem Textiles Processing Limited
SUPREM, No. 737, Green fields U17121TZ1986PLC001834 Subsidiary 100 2(87)
Puliakulam Road, Coimbatore - 641 045
3. Multiflora Processing Coimbatore Limited
SUPREM, No. 737, Green fields U01122TZ1994PLC008923 Subsidiary 100 2(87)
Puliakulam Road, Coimbatore - 641 045
S.No.
Name and address of the company CIN / GLNHolding/Subsidiary
/ Associate% of shares
heldApplicable
section
Directors Report and Management Analysis
8
IV. Share holding pattern (Equity share capital breakup as percentage of total equity)
i) Category-wise share holding as of 31-Mar-2016
S.No. Category of shareholders
No. of shares held at thebeginning of the year (01.04.2015)
No. of shares held at theend of the year (31.03.2016) % of change
duringthe year Demat DematPhysical PhysicalTotal Total
% of totalshares
% of totalshares
(A) Promoters
(1) Indian
(a) Individuals/ HUF 7332137 - 7332137 61.10 7332137 - 7332137 61.10 -
(b) Central/State Govt.(s) - - - - - - - - -
(c) Bodies corporate - - - - - - - - -
(d) FI/ Banks - - - - - - - - -
(e) Any other - - - - - - - - -
Sub-total (A)(1) 7332137 - 7332137 61.10 7332137 7332137 61.10 -
(2) Foreign
(a) Individuals (Foreign Individuals) - - - - - - - - -
(b) Bodies corporate - - - - - - - - -
(c) Institutions - - - - - - - - -
(d) QFI - - - - - - - - -
(e) Any other - - - - - - - - -
Sub-total (A)(2) - - - - - - - - -
Total shareholding of promoter and
promoter group (A)= (A)(1)+ (A)(2) 7332137 - 7332137 61.10 7332137 7332137 61.10 -
(B) Public shareholding
(1) Institutions
(a) Mutual funds/UTI 237662 225 237887 1.98 100 225 325 0.00 -1.98
(b) FI/Banks 1125 - 1125 0.01 1125 0 1125 0.01 -
(c) Central/ State Govt. (s) - - - - - - - - -
(d) Venture capital funds - - - - - - - - -
(e) Insurance companies - - - - - - - - -
(f) FII 49 200 249 - 49 200 249 - -
(g) Foreign venture capital - - - - - - - - -
(h) Any other - - - - - - - - -
Sub-Total (B)(1) 238836 425 239261 1.99 1274 425 1699 0.01 -1.98
(2) Non-institutions
(a) Bodies corporate 467987 6450 474437 3.95 471071 6450 477521 3.98 - 0.03
(b) Individuals - i. Individual shareholders
holding nominal share capital up to
` 1 lac 1923202 753922 2677124 22.31 1940400 727170 2667570 22.23 -0.07
Individuals - ii. Individual shareholders
holding nominal share capital in excess
of ` 1 lac 1098730 21325 1120055 9.33 1179552 21325 1200877 10.01 0.68
(c) QFI - - - - - - - - -
(d) Any other
(d1) Clearing member 12093 - 12093 0.10 25507 - 25507 0.21 0.11
(d2) HUF 47410 - 47410 0.39 197758 - 197758 1.65 -1.26
(d3) Market maker 128 - 128 0.00 15 - 15 - 0.00
(d4) NRI - Repat 16601 75 16676 0.14 19102 75 19177 0.16 -0.03
(d5) NRI - Non repat 4804 - 4804 0.04 2589 - 2589 0.02 -0.02
(d6) Office bearers - - - - - - - - -
(d7) Unclaimed shares 75875 - 75875 0.64 75150 - 75150 0.63 -
Sub-total (B)(2) 3646830 781772 4428602 36.90 3911144 755020 4666164 38.89 1.99
Total public shareholding(B)=(B)(1)+(B)(2) 3885666 782197 4667863 38.89 3912418 755445 4667863 38.90 0.01
Total (A)+(B) 11217803 782197 12000000 100.00 11244555 755445 12000000 100.00 -
Directors Report and Management Analysis
9
ii) Shareholding of promoters as on 31-Mar-2016
S.No. Shareholder's name
Shareholding at theend of the year (31.03.2016)
% changein shareholdingduring the year
2. Mr D Sarath Chandran (HUF) 1216251 10.14 - 1216251 10.14 - -
3. Mr Ashwin Chandran 2307457 19.23 - 2307457 19.23 - -
4. Mr Prashanth Chandran 1971891 16.43 - 1971891 16.43 - -
5. Mrs Divya Chandran 191250 1.59 - 191250 1.59 - -
6. Mr Viren Mohan 14319 0.12 - 14319 0.12 - -
7. Mr Vijay Mohan 1950 0.02 - 1950 0.02 - -
8. Mr Vikram Mohan 1875 0.02 - 1875 0.02 - -
9. Mrs Vanitha Mohan 1275 0.01 - 1275 0.01 - -
10. Ms Madhura Mohan 1012 0.01 - 1012 0.01 - -
1. Mr D Sarath Chandran (I) 1624857 13.54 - 1624857 13.54 - -
No. ofshares
% of totalshares of
the company
Shareholding at the beginningof the year (01.04.2015)
No. ofshares
% of totalshares of
the company
% of sharespledged/
encumberedto total share
% of sharespledged/
encumberedto total share
iii) Change in promoters' shareholding (please specify, if there is no change)
S.No.
Particulars
Shareholding at the beginningof the year (01.04.2015)
Cumulative shareholdingduring the year
No. ofshares
% of totalshares of
the company
% of totalshares of
the company
No. ofshares
1 At the beginning of the year
2 Date wise increase / decrease in promoters share-holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer / bonus/ sweat equity etc.)
3 At the end of the year
7332137 61.10 7332137 61.10
There is no change in the shareholding of the promoters during the year.
7332137 61.10 7332137 61.10
S.No.
For each of the top 10 shareholders namedate & reason of change
Shareholding at the beginningof the year (01.04.2015)
Cumulative shareholdingduring the year
No. ofshares
% of totalshares of
the company
% of totalshares of
the company
No. ofshares
1. Anilkumar Goel 326100 2.72 326100 2.72
At the end of the year (31.03.2016) 326100 2.72 326100 2.72
2. Gagandeep Credit Capital Pvt Ltd 269280 2.24 269280 2.24
At the end of the year (31.03.2016) 269280 2.24 269280 2.24
3. Vinodchandra Mansukhlal Parekh 105343 0.88 105343 0.88
At the end of the year (31.03.2016) 105343 0.88 105343 0.88
iv) Shareholding pattern of top ten shareholders
(Other than directors, promoters and holders of GDRs and ADRs)
Directors Report and Management Analysis
10
S.No.
Shareholding of each directors andeach KMP
Shareholding at the beginningof the year (01.04.2015)
Cumulative shareholdingduring the year
No. ofshares
% of totalshares of
the company
% of totalshares of
the company
No. ofshares
1. D Sarath Chandran (I) 1624857 13.54 1624857 13.54
At the end of the year (31.03.2016) 1624857 13.54 1624857 13.54
2. D Sarath Chandran (HUF) 1216251 10.51 1216251 10.51
At the end of the year (31.03.2016) 1216251 10.51 1216251 10.51
3. Ashwin Chandran 2307457 19.23 2307457 19.23
At the end of the year (31.03.2016) 2307457 19.23 2307457 19.23
4. Prashanth Chandran 1971891 16.43 1971891 16.43
At the end of the year (31.03.2016) 1971891 16.43 1971891 16.43
5. A Ramkrishna 1200 0.01 1200 0.01
At the end of the year (31.03.2016) 1200 0.01 1200 0.01
6. Vijay Mohan 1950 0.02 1950 0.02
At the end of the year (31.03.2016) 1950 0.02 1950 0.02
v) Shareholding of directors and KMP:
S.No.
For each of the top 10 shareholders namedate & reason of change
Shareholding at the beginningof the year (01.04.2015)
Cumulative shareholdingduring the year
No. ofshares
% of totalshares of
the company
% of totalshares of
the company
No. ofshares
4. Seema Goel 105000 0.88 105000 0.88
At the end of the year (31.03.2016) 105000 0.88 105000 0.88
5. Hiten Anantrai Sheth 60223 0.50 60223 0.50
At the end of the year (31.03.2016) 60223 0.50 60223 0.50
6. Mena Harilal Sattarshakwala 11000 0.09 11000 0.09
Add 26.06.2015 Market purchase 2000 0.02 13000 0.11
Add 03.07.2015 Market purchase 3000 0.03 16000 0.13
Add 17.07.2015 Market purchase 20000 0.17 36000 0.30
Less 07.08.2015 Market sale -15000 -0.13 21000 0.18
Add 31.03.2016 Market purchase 35000 0.29 56000 0.47
At the end of the year (31.03.2016) 56000 0.47
7. Bachh Raj Nahar 45652 0.38 45652 0.38
At the end of the year (31.03.2016) 45652 0.38 45652 0.38
8. Nirmala Arvind Solanki 42175 0.35 42175 0.35
Add 14.08.2015 Market purchase 995 0.01 43170 0.36
At the end of the year (31.03.2016) 43170 0.36
9. Manishkumar Sumatilal Mehta ( HUF) 0 0.00 0 0.00
Add 11.12.2015 Market purchase 40000 0.33 40000 0.33
At the end of the year (31.03.2016) 40000 0.33
10. Hitesh Ramji Javeri 40000 0.33 40000 0.33
At the end of the year (31.03.2016) 40000 0.33 40000 0.33
Directors Report and Management Analysis
11
S.No.
Shareholding of each directors andeach KMP
Shareholding at the beginningof the year (01.04.2015)
Cumulative shareholdingduring the year
No. ofshares
% of totalshares of
the company
% of totalshares of
the company
No. ofshares
7. Sumanth Ramamurthi 1350 0.01 1350 0.01
At the end of the year (31.03.2016) 1350 0.01 1350 0.01
8. Jairam Varadaraj 75 0.00 75 0.00
At the end of the year (31.03.2016) 75 0.00 75 0.00
9. Vijay Venkatasamy 1350 0.01 1350 0.01
At the end of the year (31.03.2016) 1350 0.01 1350 0.01
10 C N Srivatsan - - - -
At the end of the year (31.03.2016) - - - -
11 Suresh Jagannathan - - - -
At the end of the year (31.03.2016) - - - -
12 R Bhuvaneshwari - - - -
At the end of the year (31.03.2016) - - - -
13 M R Siva Shankar - - - -
At the end of the year (31.03.2016) - - - -
14 R Nithya Prabhu - - - -
At the end of the year (31.03.2016) - - - -
Directors Report and Management Analysis
` lacs
Unsecuredloans
Totalindebtedness
Deposits
Indebtedness at the beginning of the financial year
i) Principal amount 33451.16 4884.54 - 38335.70
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 74.82 - - 74.82
Total (i+ii+iii) 33525.98 4884.54 - 38410.52
Change in indebtedness during the financial year
* Addition 2736.19 8309.86 - 11046.05
* Reduction 4072.87 5393.91 - 9466.78
Net change (1336.68) 2915.95 - 1579.27
Indebtedness at the end of the financial year
i) Principal amount 32114.03 7800.49 - 39914.52
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 38.64 - - 38.64
Total (i+ii+iii) 32152.67 7800.49 - 39953.16
Secured loansexcludingdeposits
V) Indebtedness
Indebtedness of the company including interest outstanding/accrued but not due for payment.
Particulars
12
1 Independent directors
a) Fee for attending board / committee meetings Mr A Ramkrishna 1.67
Mr Sumanth Ramamurthi 0.90
Mr Jairam Varadaraj 1.37
Mr Vijay Venkatasamy 1.53
Mr C N Srivatsan 1.35
Mr Suresh Jagannathan 0.60
Ms R Bhuvaneshwari 0.75
b) Commission - -
c) Others, please specify - -
Total (1) 8.17
2 Other Non- executive directors
a) Fee for attending board committee meetings Mr Vijay Mohan 0.60
b) Commission -
c) Others, please specify -
Total (2) 0.60
Total = (1+2) 8.77
Total managerial remuneration (A + B) 176.68
S.No.
Particulars of remuneration Name of directorsTotal
amount
VI. Remuneration of directors and KMP -
A. Remuneration to managing director and whole-time directors:
S.No.
Particulars of remunerationTotal
amount
Name of MD/WTD
Mr D SarathChandran
Mr AshwinChandran
Mr PrashanthChandran
1 Gross salary
a) Salary as per provisions contained in section17(1) of the Income-tax Act, 1961 39.60 66.00 52.80 158.40
b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - - -
c) Profits in lieu of salary under section 17(3)Income- tax Act, 1961 - - - -
2 Stock option - - - -
3 Sweat equity - - - -
4 Commission
- as % of profit - - - -
- others, specify.
5 Others, please specify
a) Provident fund 2.38 3.96 3.17 9.51
Total (A) 41.98 69.96 55.97 167.91
Ceiling as per schedule V of the Act 120.00 120.00 120.00 360.00
` lacs
Directors Report and Management Analysis
B. Remuneration to other directors ` lacs
13
C. Remuneration to KMP other than MD/WTD
1 Gross salary
a) Salary as per provisions contained in section 17(1)of the Income-tax Act, 1961 5.53 25.23 30.76
b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - -
c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 - - -
2 Stock option - - -
3 Sweat equity - - -
4 Commission - - -
- as % of profit - - -
others, specify - - -
5 Others, please specify - - -
Total 5.53 25.23 30.76
S.No. Particulars of remuneration
KMP
CS CFO Total
Directors Report and Management Analysis
` lacs
VII. Penalties / Punishment / Compounding of offences:
ANNEXURE C - PARTICULARS OF EMPLOYEES
Statement pursuant to Section 197(12) of the Act, read with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is as follows:
I. Particulars pursuant to rule 5 of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014.
a) The ratio of the remuneration of each director to the median employee's remuneration for the financial
year and the percentage increase in remuneration of each director, Chief Financial Officer, Company
Secretary in the financial year 2015 - 16 :
There were no penalties, punishment or compounding of offences during the year ended 31-Mar-2016.
Name Ratio % increase in remuneration*
D Sarath Chandran 28 : 1 10
Vijay Mohan 0 : 1 -
Sumanth Ramamurthi 1 : 1 -
A Ramkrishna 1 : 1 -
Jairam Varadaraj 1 : 1 -
Ashwin Chandran 46 : 1 10
Vijay Venkatasamy 1 : 1 -
C N Srivatsan 1 : 1 -
Suresh Jagannathan 0 : 1 -
Prashanth Chandran 37 : 1 10
Bhuvaneshwari 0 : 1 -
M R Siva Shankar (CFO) NA 4
R Nithya Prabhu (CS) NA 14
14
D Sarath Chandran Chairman 41.98 10%
Ashwin Chandran Managing Director 69.96 10%
Prashanth Chandran Joint Managing Director 55.97 10% 68,369 (5,551)
M R Siva Shankar Chief Financial Officer 25.23 4%
R Nithya Prabhu Company Secretary 5.53 14%
Name DesignationCTC forFY 15-16
( in lacs) `
% increase(FY 15-16against14-15)
Turnover PAT
( in lacs) `
Particulars
IssuedCapital
(Shares)
MarketPrice(in ) `
PE Ratio
MarketCapitalisation
( in lacs) `
31.03.2015 12000000 54.70 (2.01) 6,564
31.03.2016 12000000 42.45 (0.92) 5,094
Increase / (Decrease) - (12.25) - -
% Increase / (Decrease) - (22.39) - -
Rights issue in April 1995 for face valueof 10/- per share - 20.00 - -
Increase in market price as on 31.03.2016as compared to issue Price of rights issue - 22.45 - -
% Increase / (Decrease) - 112.25 - -
`
g) Average percentage increase already made in the salaries of employees other than key managerial
personnel in the last financial year was 6%. The average increase in the key managerial remuneration
was 10%.
h) Comparison of remuneration of each of the KMP against the performance of the company :
* Note : Percentage increase in remuneration for non-executive directors is not considered in the above table, as
they are paid only sitting fee for the meetings attended during the year under review. The payment of sitting fee and
details of their attendance are given in the corporate governance report.
b) The percentage increase in the median remuneration of employees in the financial year was 6%.
c) The company has 1384 permanent employees on the rolls as on 31-Mar-2016.
d) Relationship between average increase in remuneration and company performance:
There is no direct relationship between the average increase in remuneration and company performance.
e) Comparison of the remuneration of the Key Managerial Personnel (KMP) against the performance of the
company : The remuneration of Key Managerial Personnel increased by around 10 % in FY 15-16,
compared to 14-15, in line with the HR policy of the company. The increments and annual bonus payouts
of the employees including KMP are linked to individual performance, company's performance, industry
benchmark and current compensation trends. The turnover of the company for the FY 15-16 was
68,369 lacs and profit after tax at (5,551) lacs.
f) Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the
current financial year and previous financial year and percentage increase or decrease in the market
quotations of the shares of the company in comparison to the rate at which the company came out with the
last public offer :
`
`
Directors Report and Management Analysis
15
II.Employed throughout the year and was in receipt of remuneration not less than 60 lacs per annum. `
stAshwin 1 August, Chairman B Sc (Hons),Chandran 1997 and MBA 40 19 23,07,457 69.96 -
ManagingDirector
Vice -
NameDate ofJoining
Desig-nation
Qualification AgeEx-
perience(Years)
No. ofshares
held
Remune-ration
( in lacs)`
LastEm-
ployed
Note : 1. Nature of employment is contractual.
2. Mr Ashwin Chandran is related to Mr D Sarath Chandran, Chairman and Mr Prashanth Chandran,
Joint Managing Director.
ANNEXURE D
a. Conservation of Energy
audits and inter unit comparisons are carried out on a regular basis for reduction of energy consumption.
1. For conservation of energy the company purchases third party power instead of operating gen sets,
2. For alternate source of energy the company has installed windmills with a capacity of 6.25 MW for
captive consumption, and
3. During the year, the company has not spent any amount towards cost reduction and energy
conservation equipment.
b. Technology Absorption, Adaptation and Innovation Research and Development
Research and Development activities are carried out on an ongoing basis for improving the efficiency and
also for improving quality of its products. The company has not absorbed any particular technology from any
outside source. However the company adopts latest technology available in the industry. No separate
expenditure was incurred for R & D.
a. Foreign Exchange Earnings and Outflow (` crores)
Earnings - 214
Outflow - 9
Net earnings - 205
Conservation of energy continues to receive increased emphasis at all the units of the company. Energy
By order of the board
D Sarath Chandran
Chairman
i) The key parameters for any variable component of remuneration availed by the directors : The
company does not pay any remuneration to the non-executive directors, as they are paid only sitting fee
for attending the meetings. With respect to executive directors, variable component is paid in the form
of commission, which is directly linked to the performance of the company.
j) The ratio of the remuneration of the highest paid director to that of the employees who are not directors
but receive remuneration in excess of the highest paid director during the year : Nil
k) Is the remuneration as per the remuneration policy of the company : Yes
Directors Report and Management Analysis
16
Coimbatore28-May-2016
D Sarath ChandranChairman - Executive - Promoter 5 Yes 6 3 -
(DIN : 00001885)
Vijay MohanNon-Executive - Promoter 4 No 6 2 -
(DIN : 00001843)
Sumanth RamamurthiNon-Executive - Independent 5 No 7 1 -
(DIN : 00002773)
A Ramkrishna Non-Executive - Independent 5 Yes 4 - 2
(DIN : 00001886
Jairam VaradarajNon-Executive - Independent 4 No 8 3 1
(DIN : 00058056)
Ashwin Chandran Vice Chairman and Managing Director -5 Yes 4 1 -
(DIN : 00001884) Executive - Promoter
Vijay VenkatasamyNon-Executive - Independent 5 No 4 1 1
(DIN : 00002906)
C N SrivatsanNon-Executive - Independent 5 No 1 2 -
(DIN : 00002194)
Suresh JagannathanNon-Executive - Independent 3 No 3 2 -
(DIN : 00011326)
Prashanth Chandran Joint Managing Director - 4 Yes 1 - -
(DIN : 01909559) Executive - Promoter
R BhuvaneshwariNon-Executive - Independent 4 No 1 - -
(DIN : 01628512)
Name of the director
Attendance
BoardMeetings
LastAGM
No. ofdirectorships
in othercompanies*
No. of committees**
Member ChairmanCategory
ANNEXURE E - REPORT ON CORPORATE GOVERNANCE
I. Company's philosophy on code of governance
II. Board of directors
The company adopts a self-governing corporate governance model to adhere to all the rules and regulations of the statutory authorities. It also discharges its duties and obligations in a fair and transparent manner with the object of maximizing the value of the stakeholders namely shareholders, employees, financial institutions, customers and suppliers.
The company has a very balanced structure of the board of directors, which primarily takes care of the business needs and stakeholders' interest. The composition of the board also complies with the provisions of section 149 of the Act, and regulation 17 of the listing regulation.
The board comprises of eleven directors which includes three executives and eight non-executive directors as on 31-Mar-2016.
During the year 2015-16, the board of directors met five times at the registered office of the company on15-May-2015, 07-Aug-2015, 06-Nov-2015 , 09-Feb-2016 and 18-Mar-2016.
The last annual general meeting (AGM) was held on 28-Aug-2015.
Report on Corporate Governance
Composition of directors and their attendance
* Excluding directorships in private companies and foreign companies.
** Membership / Chairmanship of the committees includes only the audit committee and stakeholders relationship committee.
DINs mentioned in this section will apply to the names of the directors in all other references in this report.
17
Name of the director No. of shares held
Vijay Mohan 1950
Sumanth Ramamurthi 1350
A Ramkrishna 1200
Jairam Varadaraj 75
Vijay Venkatasamy 1350
C N Srivatsan -
Suresh Jagannathan -
R Bhuvaneshwari -
The number of directorships, committee memberships / chairmanships of all directors are within respective limits
prescribed under the Act and listing regulations.
Disclosure of relationships between directors inter - se.
Mr D Sarath Chandran is the father of Mr Ashwin Chandran and Mr Prashanth Chandran and brother of
Mr Vijay Mohan. None of the other directors are related to each other.
Details of equity shares of the company held by non-executive directors as on 31-Mar-2016.
A. Audit committee
The audit committee of the company is constituted in compliance with the provisions of section 177 of the Companies Act, 2013 and regulation 18 (1) of the listing regulations.
The terms of reference of the audit committee are broadly as under:
a) Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
b) Recommend the appointment, remuneration and terms of appointment of auditors of the company;
c) Reviewing, with the management, the annual financial statements and auditors' report thereon before submission to the board for approval
d) Reviewing, with the management, the quarterly financial statements before submission to the board for approval
e) Review and monitor the auditors' independence and performance, and effectiveness of audit process;
f) Approval or any subsequent modification of transactions of the company with related parties;
g) Scrutiny of inter-corporate loans and investments
h) Evaluation of internal financial controls and risk management systems
i) Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
j) Discussion with internal auditors of any significant findings and follow up there on;
k) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
l) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
III. Committees of the Board
Report on Corporate Governance
18
m) Establish a vigil mechanism for directors and employees to report genuine concerns in such manner as may be prescribed;
n) To review the functioning of whistle blower mechanism.
o) The audit committee may call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the board and may also discuss any related issues with the internal and statutory auditors and the management of the Company;
p) Carrying out any other function as is mentioned in the terms of reference of the audit committee
All the members of the audit committee are independent and they possess sound knowledge of finance, accounts and the textile industry. The quorum for audit committee meeting is two independent directors.
The chairman of the audit committee, Mr A Ramkrishna was present at the last annual general meeting.
The audit committee meetings were held at the registered office of the company and during the year the committee met four times on 15-May-2015, 01-Aug-2015, 31-Oct-2015 and 02-Feb-2016. The composition of the audit committee and particulars of meetings attended by the members are given below :
A Ramkrishna - Chairman Non-Executive - Independent 4
Jairam Varadaraj Non-Executive - Independent 4
Vijay Venkatasamy Non-Executive - Independent 4
C N Srivatsan Non-Executive - Independent 3
Name of the member Category No. of meetings attended
The statutory auditors, internal auditor and executives of the company also attended the meetings. The necessary quorum was present for all the meetings. The minutes of the audit committee meetings were placed at the board meeting. The company secretary acts as the secretary of the committee. The recommendations of audit committee are duly approved and accepted by the board.
B. Nomination and remuneration committee
The nomination and remuneration committee of the company is constituted in compliance with the provisions of section 178 of the Act, and regulation 19 of the listing regulations.
The committee looks into and determines the company's policy with regard to the remuneration packages of the executive directors.
The executive directors are paid remuneration approved by the board of directors on the recommendation of nomination and remuneration committee. The remuneration so approved is subject to the approval by the shareholders at the general meeting and such other authorities as the case may be.
The company does not have employee stock option scheme.
Terms of reference
a) To identify persons who are qualified to become directors, key managerial persons and senior management personnel and to recommend to the Board their appointment / removal
b) To carry out evaluation of every director's performance, and
c) To formulate and recommend to the board, a policy determining remuneration, qualifications, positive attributes and independence of a director.
The company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) and commission (variable component) to its executive directors.
During the year, the nomination and remuneration committee meeting was held on 03-Sep-2015, 06-Nov-2015 and 18-Mar-2016 at the registered office of the company. The necessary quorum was present for all the meetings. The company secretary acts as the secretary of the committee.
Report on Corporate Governance
19
Name of the member Category No. of meetings attended
A Ramkrishna - Chairman Non Executive - Independent 3
Jairam Varadaraj Non Executive - Independent 2
Vijay Venkatasamy Non Executive - Independent 3
The sitting fee for non-executive directors were fixed by the board of directors based on the recommendation of the
nomination and remuneration committee, considering various factors like time involvement, etc.
The company paid a sitting fee of 15,000 per meeting to its non-executive directors for attending meetings of the
board of directors and the audit committee meetings and 1,000 per meeting for other committee meetings.
Performance evaluation criteria for independent directors
The performance evaluation criteria for independent directors are determined by the inputs received from the
directors and Nomination and Remuneration committee. An indicative list of factors for evaluation includes
participation and contribution by a director, effective deployment of knowledge and expertise towards the growth
and betterment of the company, impact and influence on the growth of the company.
Details of the remuneration for the year ended 31-Mar-2016.
The remuneration paid/payable to the executive directors of the company for the year ended 31-Mar-2016, are as
under :
Name of the director Salary and perks Commission Total Service contract
D Sarath ChandranChairman
Ashwin ChandranVice Chairman andManaging Director
Prashanth ChandranJoint Managing Director
41.98 - 41.98 01-Apr-2014 to 31-Mar-2017
69.96 - 69.96 01-Apr-2014 to 31-Mar-2017
55.97 - 55.97 01-Apr-2014 to 31-Mar-2017
( in Lacs)`
The company does not pay remuneration to any of its non-executive directors barring sitting fees for attending
the meeting(s).
The composition and particulars of meetings attended by the members are given below.
The details of the sitting fees paid during the year to the non-executive directors are as under :
Name of the director
Vijay Mohan 60,000
Sumanth Ramamurthi 90,000
A Ramkrishna 1,67,000
Jairam Varadaraj 1,37,000
Vijay Venkatasamy 1,53,000
C N Srivatsan 1,35,000
Suresh Jagannathan 60,000
R Bhuvaneshwari 60,000
Sitting fees (`)
Report on Corporate Governance
20
There has been no materially relevant pecuniary transaction or relationship between the company and its non-
executive directors during the year. There are no convertible instruments held by non-executive directors.
Policy for appointment and remuneration of directors, KMP and senior management
The nomination and remuneration committee (NR Committee) and the board of directors, have adopted a
nomination and remuneration policy, which, inter alia, deals with the criteria for appointment of the directors, KMP
and senior management personnel and their remuneration.
a) Criteria for appointment of directors
While recommending the appointment of the directors to the board, the NR Committee shall consider criteria/
attributes like qualification, expertise, experience of the directors in their respective fields, professional or
business standing and diversity of the board. The NR committee has discretion to decide whether
qualification, expertise and experience possessed by a person is sufficient/ satisfactory for the concerned
position.
b) Remuneration
For determining the remuneration of the directors, KMP and senior management personnel, the NR
Committee shall consider the following :
1. A non-executive director shall be entitled to receive sitting fees for each meeting of the board or committee of
the board attended by him, of such sum as may be approved by the board of directors within the overall limits
prescribed under the Act, and the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014.
2. Executive directors shall be paid such remuneration as may be recommended by the NR Committee and the
board with the approval of the shareholders at the AGM and it shall be within the overall limits prescribed
under the Act.
3. The remuneration including annual increment and performance bonus of KMP, senior management
personnel and other employees, is decided based on the roles and responsibilities, the company's
performance, individuals performance, industry benchmark and current compensation trends in the market.
C) Stakeholders' relationship committee
The stakeholders relationship committee is constituted in compliance with the provisions of section 178 of
the Act, and regulation 20 of the listing regulations.
The committee deals in matters relating to transfer and transmission of shares, issue of duplicate share
certificates, review of dematerialized shares, redressing of investors complaints. The share transfers/
transmissions are approved/ratified by the committee. The minutes of the committee are placed at the board
meetings from time to time.
Terms of reference
a) To resolve the grievances of the security holders of the company,
b) To approve share transfer, transmission, issue duplicate certificates, fresh share certificates by way of split or
consolidation of the existing certificates, and
c) Any other matter relating to the security holders or matters assigned/ delegated by the board.
The composition of the stakeholders relationship committee and particulars of meetings attended by the members
are as follows :
Report on Corporate Governance
21
Name of the member Category No. of meetings attended
D Sarath Chandran
Ashwin Chandran
Executive - Independent 13
A Ramkrishna - Chairman Non Executive - Independent 13
Executive - Independent 13
D) Other Committees
1. Corporate social responsibility committee
The committee looks into and determines the company's policy with regard to the CSR activities to be undertaken
by the company. The committee met once during the year on 15-May-2015. The minutes of the committee are
placed at the board meetings from time to time. The necessary quorum was present for the meeting.
Terms of reference
a) To formulate and recommend to the board, a CSR policy which shall indicate the activities to be undertaken
by the company as specified in Schedule VII of the Act,
b) Recommend the amount of expenditure to be incurred on the activities referred in the CSR policy, and
c) Monitor the CSR policy of the company from time to time.
Thirteen meetings of the stakeholders relationship committee were held during the year under review i.e. 28-Apr-
2015, 20-May-2015, 30-Jun-2015, 31-Jul-2015, 26-Aug-2015, 30-Sep-2015, 15-Oct-2015, 31-Oct-2015, 14-Nov-
2015, 30-Nov-2015, 15-Dec-2015, 31-Dec-2015 and 31-Mar-2016. The necessary quorum was present for all the
meetings. The company secretary acts as the secretary of the committee.
Details of complaints received and redressed:
Opening balance Received during the year Redressed during the year Closing balance
Nil NilNil Nil
Name of the member Category No. of meetings attended
D Sarath Chandran
Ashwin Chandran
- Chairman Executive - Independent 1
A Ramkrishna Non Executive - Independent 1
Executive - Independent 1
The composition of the CSR committee and particulars of meetings attended by the members are as follows :
2) Risk management committee
The company has constituted a Risk Management Committee and adopted a policy on risk management, for
identifying and managing risk. The same is hosted on the website of the company. The committee comprises
of the following members a) Mr C N Srivatsan (Non-Executive - Independent), b) Mr Ashwin Chandran
(Executive - Non Independent), c) Mr Prashanth Chandran (Executive - Non Independent), d) Mr M R Siva
Shankar (Chief Financial Officer) and e) Mr R Nithya Prabhu (Company Secretary).
Presently audit committee reviews the risk management report periodically. The committee has not met
during the year under review.
3) Finance committee
The Company has a finance committee of directors comprising of a) Mr D Sarath Chandran (Executive - Non
Report on Corporate Governance
22
st 2013, 51 AGM 20-Sep-2013 at 4.30 PM 1. Alteration of articles of association of the company
2. Increase in authorised share capital of the company
3. Alteration of the memorandum of association, and
4. Issue of bonus shares.
nd2014, 52 AGM 05-Sep-2014 at 4.30 PM 1. Appointment of Mr D Sarath Chandran as Chairman
2. Appointment of Mr Ashwin Chandran as Vice-Chairman and Managing Director
3. Appointment of Mr Prashanth Chandran as Joint Managing Director
4. Appointment of Mr A Ramkrishna as an independent director
5. Alteration of articles of association of the company and
6. Increase in borrowing power of the board in excess of the aggregate of the paid
up capital and free reserves of the company under section 180(1)(c) of the
Companies Act, 2013.
rd2015, 53 AGM 28-Aug-2015 at 4.30 PM Nil
Details Dates and time Special Resolutions
Independent), b) Mr Ashwin Chandran (Executive - Non Independent) and Mr Prashanth Chandran
(Executive - Non Independent). The finance committee is responsible for approval of the opening and closing
of bank accounts, borrowings, investments and to authorise persons to operate the bank accounts of the
company.
Independent directors' meeting
In accordance with the provisions of schedule IV of the Act, and regulation 25 (3) of the listing regulations, a
meeting of the independent directors of the company was held on 18-Mar-2016 without the attendance of non-
independent directors and members of the management.
Terms and conditions for appointment of independent directors
The terms and conditions for appointment of independent directors are placed on company's website
http://www.precot.com/investor-relations /.
Familiarisation program for independent directors
The details of familiarisation program for the independent directors are placed on the website of the company
http://www.precot.com/investor-relations /.
Address for CorrespondencePrecot Meridian Limited,Regd Office: SUPREMNo. 737, Puliakulam Road, Coimbatore – 641045Phone : 0422 - 4321100Email: [email protected] : www.precot.comCIN : L17111TZ1962PLC001183
Compliance officer
Company Secretary and Compliance OfficerR Nithya Prabhu
Management analysis report
The management analysis report forms part of this annual report.
General body meetings
The general body meetings of the company during the preceding three years were held at Chamber towers,
Avinashi Road, Coimbatore - 641 018
Report on Corporate Governance
23
MonthPrices ( ` ) S & P Nifty
Low LowHigh High
April 2015 55.50 65.00 8181.50 8834.00
May 2015 56.50 62.75 8057.30 8458.95
June 2015 50.25 66.50 7965.35 8433.40
July 2015 63.90 78.45 8328.55 8633.50
August 2015 56.60 86.20 7791.85 8588.65
September 2015 56.00 60.35 7558.80 7981.90
October 2015 57.00 60.40 7950.90 8295.45
November 2015 51.90 57.95 7731.80 8060.70
December 2015 51.00 67.20 7610.45 7954.90
January 2016 47.80 64.00 7276.80 7963.20
February 2016 34.75 50.00 6970.60 7555.95
March 2016 36.20 42.75 7222.30 7738.40
General shareholder information
Annual general meeting : 02-
Venue : Chamber Hall, Chamber Towers, 8/732, Avinashi Road,
Coimbatore 641 018st st
Financial year : 1 April to 31 March
Date of book closure : 26-Aug-2016 to 02-Sep-2016
Dividend payment date :
Listing on stock exchanges : National Stock Exchange of India Limited (NSE)
Exchange Plaza, C-1, Block G, Bandra Kurla Complex
Bandra (East), Mumbai 400 051
Stock code : PRECOT, ISIN : INE283A01014
Sep-2016 at 4.30 pm
, if any Within seven working days from the date of annual general
meeting.
No EGM or court convened meeting of the members was held during the year. No special resolution was passed
by the company last year through postal ballot. No special resolution is proposed to be conducted through postal
ballot.
Means of communication
The quarterly, half-yearly and yearly financial results of the company are sent to the stock exchange immediately
after the approval of the board. These are widely published in Business Line (National issue) and Malai Malar
(Tamil daily). These results are simultaneously posted on the website of the company at www.precot.com
The company follows April-March as the financial year.
The tentative dates of board meetings for consideration of quarterly financial results for the FY ending 31-Mar-
2017 are as follows.
1. First quarters results - First week of August 2016, 2. Second quarter and half yearly results - First week of
November 2016, 3. Third quarter results - First week of February 2017, 4. Fourth quarter and annual results -
Last week of May 2017.
Results and reports of the company are also available in www.nseindia.com
Official news releases are made whenever it is considered necessary.
There were no specific presentations made to institutional investors or to analysts during the year.
Market price, date and performance in comparison with S&P Nifty:
Report on Corporate Governance
24
Annual listing fee for the year 2016-17 has been paid to NSE.
The company has paid custodial fees for the year 2016-17 to National Securities Depository Limited and Central
depository services (India) limited.
Branch office:
M/s Link Intime India Pvt Limited,
Surya, 35 Mayflower Avenue, Senthil Nagar,
Sowripalayam Road,
Coimbatore - 641 028.
E-mail : [email protected]
Phone : 0422 - 2314792
Head office:
M/s Link Intime India Pvt Limited,
C-13, Pannalal Silk Mills Compound,
L B S Marg, Bhandup (West) Avenue,
Mumbai - 400 078.
Share transfer process :
Reconcilations of Share Capital audit :
The company's shares are traded on the stock exchange only in electronic mode. Shares in physical form are
processed by the registrar and transfer agents M/s Link Intime India Private Limited only after getting approval
from stakeholders relationship committee.
The share transfers are registered and returned within the period of 15 days of receipt if documents are in order.
Half yearly certificates confirming due compliance of share transfer formalities by the company from practising
company secretary has been submitted to the stock exchange within stipulated time as per listing regulations.
A qualified practicing company secretary carried out share capital audit to reconcile the total admitted capital with
NSDL and CDSL with the total issued and listed capital. The share capital audit report confirms that the total issued
/ paid-up capital is in intact with the total number of shares in physical form and the total number of dematerialized
shares held with NSDL and CDSL.
Registrar and share transfer agent
(for both physical and demat segments)
Share holding pattern as on 31 - Mar - 2016 :
Category No. ofshares held
Percentageof holding
Promoters and Promoters group
Indian
Public
Mutual funds/UTI
Financial Inst/ Banks
Bodies corporate
Public and others
Total
7332137 61.10
325 0.00
1125 0.02
477521 3.98
4188892 34.90
12000000 100.00
Distribution of shareholding as on 31- Mar - 2016 :
Shareholdingrange
No. ofholders
Percentageof holders
No. ofshares
Percentageof shares
1-500
501-1000
1001-2000
2001-3000
3001-4000
4001-5000
5001-10000
10001&Above
Total
4845 79.06 800952 6.67
567 9.25 416247 3.47
369 6.02 535097 4.46
121 1.98 296047 2.47
62 1.01 217196 1.81
33 0.54 152480 1.27
81 1.32 560694 4.67
50 0.82 9021287 75.18
6128 100.00 12000000 100.00
Dematerialization status of shares as on st
31 March 2016 :
Particulars No. of Shares % to Share capital
National Securities Depository Limited
Central Depository Services (India) Limited
Total
10030124 83.58
1214431 10.12
11244555 93.70
Report on Corporate Governance
25
Plant locations:
1 : Kanjikode, Palakkad, Kerala
2 : Kodigenahalli,Hindupur, Andhra Pradesh
3 : Nanjegoundanpudur,Pollachi, Tamilnadu
4 : Chandrapuram, Walayar, Kerala
5 : Gowribidnur, Kolar, Karnataka
6 : Perundurai, Tamil Nadu
7 : Hassan, Karnataka.
Address for correspondence:Precot Meridian Limited,Secretarial Department,Regd. Office: SUPREMNo. 737, Puliakulam Road,Coimbatore – 641045Phone: 0422 - 4321100 Email: [email protected] Website: www.precot.com CIN: L17111TZ1962PLC001183
Disclosures
During the year under review the company has not made any fresh issue of shares. The paid up capital of the
company stood at 1,200 lacs as at 31-Mar-2016.
Details of transactions with related parties are provided in note no. 2.39 to notes forming part of the accounts
in accordance with the provision of Accounting Standard 18. There is no materially significant related party
transaction that may have potential conflict with the interest of the company at large.
During the last 3 years, there were no strictures or penalties imposed on the company by either stock
exchanges or SEBI or any statutory authority for non-compliance on any matter relating to the capital
markets.
The company has followed the accounting standards referred to in section 133 of the Act. The significant
accounting policies are setout in the notes to the financial statements.
The company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism as
defined under section 177 (9) of the Act, and regulation 22 of listing regulations, for directors and employees
to report concerns about unethical behaviour. No person has been denied access to the chairman of the
audit committee.
The company has complied with all the mandatory requirements of corporate governance norms as
enumerated under regulation 17 to 27 and clause (b) to (i) of regulations 46 (2) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 with the stock exchanges. In addition, the
company has also adopted the following non-mandatory requirements, 1) Company s financial statement
are unmodified, 2) Separate posts of chairperson and managing director, 3) The internal auditor of the
company directly reports to the audit committee.
The company has framed polices for determining 'material subsidiaries' and related party transaction ,
which are disclosed on the website at the following link http://www.precot.com/investor-relations /
CEO/CFO certificate: A certificate signed by the CEO and CFO has been placed at all board meetings.
The company has a robust framework and governance mechanism in place to ensure that the organisation is
adequately protected from the market volatility in terms of price and availability of raw materials and finished
goods.
The company has managed the foreign exchange risk with appropriate hedging activities in accordance with
forex policy of the company. The company does not enter into any derivative instruments for trading or
speculative purposes. The details of foreign exchange exposure as on 31-Mar-2016 are disclosed in notes to
the financial statements.
The company has prepared a risk management framework to identify, minimize and mitigate business and
process related risk at predefined intervals.
The details of unclaimed suspense account are disclosed in the board s report.
l
l
l
l
l
l
l
l
l
l
l
l
stThere are no outstanding GDR / ADR / Warrants or any convertible instruments as on 31 March 2016
Report on Corporate Governance
26
G Vasudevan
Practicing Company Secretary
Certificate of Practice No. 6522
Coimbatore28-May-2016
Code of conduct
The board of directors has laid down a code of conduct for all the board members and senior management of the
company. The same has been posted on the website of the company.
All board members and senior management personnel have affirmed their compliance with the code of conduct for
the year under review. A declaration to that effect signed by the chairman is attached and forms part of the annual
report of the company.
Code of conduct for insider trading
As per SEBI (Prohibition of insider trading) regulations, 2015, the company has adopted a code of conduct for
prevention of insider trading. All the directors, employees at senior management level and other employees who
could have access to the unpublished price sensitive information of the company are governed by this code.
During the year under review there has been due compliance with the said code.
By order of the board
D Sarath Chandran
Chairman
Coimbatore28-May-2016
Compliance Certificate
To the members of Precot Meridian Limited
I have examined the compliance of conditions of corporate governance by M/s. Precot Meridian Limited,
(CIN : L17111TZ1962PLC001183) for the year ended on 31-Mar-2016, as stipulated in clause 49 of the listing
agreement of the company with stock exchange for the period from 01-Apr-2015 to 30-Nov-2015 and as per the
regulation 15 (2) of SEBI (listing obligations and disclosure requirements) regulations 2011 of the said company
with stock exchange for the period from 1-Dec-2015 to 31-Mar-2016. The compliance of conditions of corporate
governance is the responsibility of the management. Our examination was limited to procedures and
implementation thereof, adopted by the company for ensuring the compliance of the conditions of the corporate
governance. It is neither an audit nor an expression of opinion on the financial statements of the company.
In my opinion and to the best of my information and according to the explanations given to me, I certify that the
company has complied with the conditions of corporate governance as stipulated in the above mentioned listing
agreement / listing regulations as applicable.
I state that no investor grievances are pending for a period exceeding one month against the company as per the
records maintained by the shareholders/investors relations committee. We further state that such compliance is
neither an assurance as to the future viability of the company nor the effectiveness with which the management
has conducted the affairs of the company.
Report on Corporate Governance
27
Declaration regarding compliance of company's code of conduct
All the board members and senior management personnel affirmed compliance with the code of conduct of the company for the financial year ended 31-Mar-2016.
By order of the Board
D Sarath Chandran
Chairman
Coimbatore28-May-2016
Annexure F - Report on Corporate Social
Responsibility (CSR)
Report on Corporate Social Responsibility as per rule 8
of Companies (Corporate Social Responsibility Policy)
Rules, 2014 :
1.a) A brief outline of the company's CSR policy :
The object of CSR policy is to directly or indirectly
take up programmes that benefit the
communities in & around the units of the
company and resulting in enhancing the quality of
life & economic well being of the locality and to
generate, through its CSR initiatives, a
community goodwill for the company. To help
reinforce a positive & socially responsible image
as a corporate entity. Ensure an increased
commitment at all levels in the organization, to
operate its business in an economically, socially
and environmentally sustainable manner, while
recognizing the interests of all its stakeholders.
b) Overview of projects or programs proposed
to be undertaken:
The projects undertaken will be within the broad
framework of schedule VII of the Act. Some of
them are promoting education, ensuring
environmental sustainability, contribution to the
Prime Minister's National relief fund, rural
development projects etc.
c) Reference to the web-link to the CSR policy
and projects or programs:
The CSR policy of the company is available in the
company's website http://www.precot.com/
investor-relations/
2. The composition of the CSR committee:
The Company has a CSR committee of directors
comprising of Mr D Sarath Chandran, Chairman
of the Committee, Mr A Ramkrishna and
Mr Ashwin Chandran.
3. Average net profit of the company for last three
financial years for the purpose of computation of
CSR : Rs. (48.24) lacs
4. Prescribed CSR Expenditure (two percent of the
amount as in item 3 above): Nil
5. Details of CSR spent during the financial year:
a) Total amount spent for the financial year -
Nil
b) Amount unspent - NA
c) Manner in which the amount spent during
the financial year - NA
6. In case the company has failed to spend the two
per cent of the average net profit of the last three
financial years or any part thereof, the company
shall provide the reasons for not spending the
amount in its Board report - NA
7. A responsibility statement of the CSR committee
that the implementation and monitoring of CSR
policy, is in compliance with CSR objectives and
policy of the Company.
We hereby declare that implementation and monitoring
of the CSR policy are in compliance with CSR
objectives and policy of the Company.
Report on Corporate Social Responsibility (CSR)
Coimbatore28-May-2016
Ashwin ChandranVice Chairman andManaging Director
A RamkrishnaChairman
CSR Committee
28
`
`
Lacs
2011 2012 2013 2014 2015 2016
Operating Results
Total revenue
PBIDT
Interest
PBDT
Depreciation
Income Tax
Other Taxes
PAT
Dividend & Dividend Tax
Retained cash earnings
Performance Parameters
Net Fixed Assets (WDV)
Share Capital
Reserves & Surplus
Net worth
Long Term Borrowings
Debt : Equity
Dividend (%)
Earnings per share ( )
57997 60266 66717 73819 74943 69468
8556 (1395) 8939 9239 3809 2014
1459 2872 2612 3241 3362 3765
7097 (4267) 6327 5998 447 (1751)
2696 2991 3032 3945 3691 3800
872 250 228 322 - -
269 (2225) 998 (1314) 19 -
3260 (5283) 2069 3045 (3264) (5551)
808 - 94 281 - -
5417 (4517) 6005 5395 447 (1751)
22081 24321 37276 36389 33591 31388
695 748 800 1200 1200 1200
15855 11036 13175 14801 12265 6714
16550 11784 13975 16001 13465 7914
13234 16435 26407 23925 22607 20615
0.8 1.4 1.9 1.5 1.7 2.6
100 - 10 20 - -
47 (76) 17 25 (27) (46)
Performance Highlights
29
Independent Auditors report
To the Members of Precot Meridian Limited
Report on the Standalone Financial Statements
Management's Responsibility for the Standalone Financial Statements
Auditors' Responsibility
We have audited the accompanying standalone financial statements of Precot Meridian Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the standalone financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, its loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditors' Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in "Annexure 1", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2) As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books,
c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give our separate Report in "Annexure 2".
Auditors Report
30
g. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 2.29 on Contingent Liabilities to the standalone financial statements;
ii) The Company has made provision, as required under the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 2.04 to the standalone financial statements;
iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Place : CoimbatoreDate : 28-May-2016
For Haribhakti & Co. LLPChartered Accountants
ICAI Firm Reg.No.: 103523WC S Sathyanarayanan
PartnerM.No.: 028328
Auditors Report
Annexure I to the Independent Auditor's Report
[Referred to in paragraph 1 under 'Report on Other
Legal and Regulatory Requirements' in the
Independent Auditor's Report of even date to the
members of Precot Meridian Limited on the standalone
financial statements for the year ended 31st March
2016.
i) a) The Company has maintained proper
records showing full particulars, including
quantitative details and situation of fixed
assets.
b) During the year, all the fixed assets have
not been physically verified by the
management. However, there is a regular
programme of verification which, in our
opinion, is reasonable having regard to the
size of the Company and the nature of its
assets.
c) The title deeds of immovable properties
recorded as fixed assets in the books of
account of the Company are held in the
name of the Company.
ii) The inventory has been physically verified by the
management during the year. In our opinion, the
frequency of verification is reasonable. As
informed, no material discrepancies were
noticed on physical verification carried out during
the year.
iii) As informed, the Company has not granted any
loans, secured or unsecured to companies,
firms, Limited Liability Partnerships or other
parties covered in the register maintained under
Section 189 of the Act. Accordingly, paragraph 3
(iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not
applicable to the Company.
iv) Based on information and explanation given to us
in respect of loans, investments, guarantees and
securities, the Company has complied with the
provisions of Section 185 and 186 of the Act.
v) In our opinion and according to the information
and explanations given to us, the Company has
not accepted any deposits from the public within
the provisions of Sections 73 to 76 of the Act and
the rules framed there under.
vi) We have broadly reviewed the books of account
maintained by the Company in respect of
products where the maintenance of cost records
has been specified by the Central Government
under sub-section (1) of Section 148 of the Act
and the rules framed there under and we are of
the opinion that prima facie, the prescribed
accounts and records have been made and
maintained.
vii) a) The Company is generally regular in
depositing with appropriate authorities,
undisputed statutory dues including provident
fund, employees' state insurance, income tax,
sales tax, service tax, value added tax, customs
duty, excise duty, cess and any other material
statutory dues applicable to it, however, there
have been slight delay in few cases.
31
x) During the course of our examination of the books
and records of the Company, carried out in
accordance with the generally accepted auditing
practices in India, and according to the information
and explanations given to us, we have neither come
across any instance of fraud by the Company or any
fraud on the Company by its officers or employees,
noticed or reported during the year, nor have we
been informed of any such instance by the
management.
xi) According to the information and explanations given
to us, managerial remuneration has been paid /
provided in accordance with the requisite approvals
mandated by the provisions of Section 197 read
with Schedule V to the Act.
xii) In our opinion and according to the information and
explanations given to us, the Company is not a Nidhi
Company. Therefore, paragraph 3(xii) of the Order
is not applicable to the Company.
xiii) According to the information and explanation given
to us, all transactions entered into by the Company
with the related parties are in compliance with
Sections 177 and 188 of Act, where applicable and
the details have been disclosed in the Financial
Statements etc., as required by the applicable
accounting standards.
xiv) The Company has not made any preferential
allotment or private placement of shares or fully or
partly convertible debentures during the year under
review. Therefore, paragraph 3(xiv) of the Order is
not applicable to the Company.
xv) According to the information and explanations given
to us, the Company has not entered into any non-
cash transactions with directors or persons
connected with him during the year.
xvi) According to the information and explanation given
to us, the Company is not required to be registered
under Section 45-IA of the Reserve Bank of India
Act, 1934.
viii) According to the information and explanations given
to us, the Company has not defaulted in repayment
of loans or borrowings to financial institution(s),
bank(s), government(s) or dues to debenture
holder(s).
ix) In our opinion and according to the information and
explanations given to us, the Company has utilized
the money raised by way of term loans during the
year for the purposes for which they were raised.
The company did not raise any money by way of
Initial Public Offer or further public offer including
debt instruments during the year. Place : CoimbatoreDate : 28-May-2016
For Haribhakti & Co. LLPChartered Accountants
ICAI Firm Reg.No.: 103523WC S Sathyanarayanan
PartnerM.No.: 028328
Central Excise
Act 1944
Central Sales Central Sales Tax 648.18 1998-99 & Madras High Court
Tax Act,1956 1999-2000
Central Excise Excise Duty and Penalties 29.78 2001 to 2003 CESTAT, Bangalore
Act 1944
Central Excise Excise Duty, Penalties and 22.31 2008-2009 Commissioner Appeals,
Act 1944 Interest Kochi
Service Tax Service Tax, Penalties and 9.49 2007-08 CESTAT
Interest
Income Tax Income Tax 371.42 AY 2009-10 to ITAT
Act,1961 AY 2010-11 Chennai
TNVAT Act, Sales Tax 4.18 2014-15 Joint
2006 and Penalty Commissioner
(Appeals), Coimbatore
ESI Act ,1948 Employees 15.50 2014-15 District Court,
State Insurance Palakkad
Excise Duty and Penalties 432.74 2001-2002 Supreme Court
Name of theStatute
Nature of duesAmount(` lacs)
Period towhich the
amount relates
Forum wheredispute is pending
Auditors Report
According to the information and
explanations given to us, no undisputed
amounts payable in respect of provident
fund, employees' state insurance, income
tax, sales tax, service tax, value added tax,
customs duty, excise duty, cess and any
other material statutory dues applicable to
it, were outstanding, at the year end, for a
period of more than six months from the
date they became payable.
b) According to the information and
explanation given to us, the dues
outstanding with respect to, income tax,
sales tax, service tax, value added tax,
customs duty, excise duty on account of any
dispute, are as follows:
32
ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements' in the Independent Auditor's Report of even date to the members of Precot Meridian Limited on the standalone financial statements for the year ended 31st March 2016.]
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Precot Meridian Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the
auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
Place : CoimbatoreDate : 28-May-2016
For Haribhakti & Co. LLPChartered Accountants
ICAI Firm Reg.No.: 103523WC S Sathyanarayanan
PartnerM.No.: 028328
33
Auditors Report
As at As at
Note 31.03.2016 31.03.2015` Lacs ` Lacs
Equity and LiabilitiesShareholders' funds
Share CapitalReserves and Surplus
Non-current liabilitiesLong Term Borrowings
Long Term Provisions
Current LiabilitiesShort Term BorrowingsTrade Payables
Other Current LiabilitiesShort Term Provisions
AssetsNon-current Assets
Fixed AssetsTangible Assets Intangible Assets
Capital Work-in-progress -
Non-current InvestmentsLong Term loans and advances
Current AssetsInventoriesTrade receivablesCash and bank balancesShort term loans and advancesOther current assets
2.01 1,200.00 1,200.002.02 6,714.02 12,264.95
7,914.02 13,464.95
2.03 15,899.78 18,246.37Other Long Term Liabilities 2.04 378.61 -
2.05 171.58 195.2716,449.97 18,441.64
2.06 19,292.63 15,728.292.07
Total outstanding dues of micro and smallenterprises 29.18 -Total outstanding dues of creditors otherthan micro and small enterprises 2,021.05 1,642.39
2.08 8,980.65 7,979.322.09 84.84 94.83
30,408.35 25,444.8354,772.34 57,351.42
2.10 31,232.09 33,422.682.10 90.15 100.21
65.98 68.52
2.11 1,774.11 1,774.112.12 2,480.40 3,089.58
35,642.73 38,455.10
2.13 12,842.49 9,759.152.14 4,676.34 4,065.012.15 265.66 309.282.16 898.12 1,060.672.17 447.00 3,702.21
19,129.61 18,896.3254,772.34 57,351.42
Balance Sheet
Significant accounting policies & Notes on Financial Statements 1 & 2.01 to 2.42
The accompanying notes form an integral part of financial statements.
34
Vide our report of even date attachedFor Haribhakti & Co. LLPChartered Accountants
Firm Reg.No.: 103523WC S SathyanarayananPartnerM.No. : 028328Place : CoimbatoreDate : 28-May-2016
ICAI
D Sarath ChandranChairman
(DIN : 00001885)
Ashwin ChandranVice Chairman and Managing Director
(DIN : 00001884)
M R Siva ShankarChief Financial Officer
R Nithya PrabhuCompany Secretary
For and on behalf of the directors
Statement of Profit and loss
Note 2015-16 2014-15
Lacs Lacs
Revenue From Operations
Other income
Total Revenue
Expenses
Cost of materials consumed
Changes in inventories of finished goods and work-in-progress
Employee benefits expense
Finance costs
Depreciation and amortization expense
Other expenses
Total Expenses
Tax expense:
Profit / ( Loss ) for the year
Earnings per equity share (Nominal value of share 10)
` `
`
2.18 68,368.60 74,694.84
2.19 1,099.55 247.78
69,468.15 74,942.62
2.20 36,380.28 42,174.79
2.21 (852.12) 1,739.21
Purchase of Traded Goods 2,298.41 2,737.26
2.22 7,813.80 7,580.21
2.23 3,764.96 3,362.41
2.24 3,799.85 3,691.49
2.25 19,868.72 18,374.51
73,073.90 79,659.88
Profit / (Loss) before exceptional items (3,605.75) (4,717.26)
Exceptional items 2.37 (1,945.18) 1,472.63
Profit / ( Loss ) before tax (5,550.93) (3,244.63)
Current tax - -
For earlier year - -
MAT Credit - -
Deferred tax - 18.91
(5,550.93) (3,263.54)
2.26 (46.26) (27.20)
35
Significant accounting policies & Notes on Financial Statements 1 & 2.01 to 2.42
The accompanying notes form an integral part of financial statements.
Vide our report of even date attachedFor Haribhakti & Co. LLPChartered Accountants
Firm Reg.No.: 103523WC S SathyanarayananPartnerM.No. : 028328Place : CoimbatoreDate : 28-May-2016
ICAI
D Sarath ChandranChairman
(DIN : 00001885)
Ashwin ChandranVice Chairman and Managing Director
(DIN : 00001884)
M R Siva ShankarChief Financial Officer
R Nithya PrabhuCompany Secretary
For and on behalf of the directors
Nature of operations
Precot Meridian Limited has been a player in the textile
industry since 1962. It started its first production in 1964
with an initial capacity of 12,096 spindles at Kanjikode,
Kerala. At present it has units in the four southern states of
India viz., Tamil Nadu, Kerala, Andhra Pradesh and
Karnataka with a total spinning capacity of 2,25,000
spindles and 960 rotors. In 2013, the company has set up
a greenfield technical textile at Hassan in the State of
Karnataka.
1. Significant Accounting Policies
a. Accounting Convention :
The financial Statements have been prepared to
comply in all material respects with the Accounting
Standards specified under section 133 of the
Companies Act read with rule 7 of the companies
(Accounting Standards) Rules, 2014 and the
relevant provisions of the companies Act, 2013. The
Financial Statements have been prepared under the
historical cost convention on an accrual basis. This
accounting policy has been consistently applied by
the company with those used in the previous year.
b. Use of Estimates
The preparation of financial statements requires the
management of the company to make estimates
and assumptions that affect the reported balances
of Assets and Liabilities and disclosures relating to
the contingent liabilities as at the date of the financial
statements and reported amounts of income and
expenses during the year. Examples of such
estimates include provision for doubtful debts,
employees' retirement benefit plan, provision for
income and other taxes, useful life of fixed assets,
etc. Actual results could differ from the estimates
made. Any revision to accounting estimates is
recognized prospectively in the year in which the
events are materialized.
c. Fixed Assets :
Fixed Assets are stated at original cost net of
tax/duty credits availed, if any, less accumulated
depreciation, accumulated amortisation and
cumulative impairment if any. Costs include
preoperative expenses, applicable borrowing cost,
exchange gain/loss on restatement of long term
foreign currency liability and all expenses related to
acquisition and installation of the assets concerned.
d. Intangible Assets
Intangible assets acquired separately are measured
on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less
accumulated amortisation and accumulated
impairment losses, if any. Internally generated
intangible assets, excluding capi tal ised
development costs, are not capitalised and
expenditure is reflected in the statement of profit and
loss in the year in which the expenditure is incurred.
e. Depreciation & Amortisation
Depreciation is provided on straight line method
based on the useful life as specified in schedule II of
the Companies Act, 2013, except in respect of plant
and machinery where the useful life is estimated to
be 20 years (10 years on triple shift basis) based on
technical evaluation. Intangible assets are
amortized on a straight line basis over the estimated
useful economic life.
Where the cost of part of the asset is significant to
the total cost of the asset and if the part of the asset
has a different useful life than the main asset, useful
life of that part is determined separately for
depreciation.
f. Impairment of Assets:
The carrying amount of assets are reviewed, as at
each balance sheet date, to determine if there is any
indication of impairment based on internal/external
factors. An asset is treated as impaired when the
carrying cost of the asset exceeds its recoverable
value. The recoverable amount is greater of the
asset's net selling price and value in use. In
assessing the value in use, the estimated future
cash flows as a cash generating unit are discounted
to the present value. An impairment loss is charged
to the statement of profit and loss in the year in which
an asset is identified as impaired.
g. Borrowing Costs:
Borrowing Costs attributable to the acquisition or
construction of qualifying assets are capitalized as
part of such assets. All the other borrowing costs are
charged to revenue. A qualifying asset is an asset
that necessarily requires a substantial period of time
to get ready for its intended use or sale.
h. Investments :
a. Long Term Investments are stated at cost.
b. Provision for diminution in value of long-term
investments is made, if the diminution is other
than temporary.
Notes on Financial Statements
36
i. Inventories :
a) Inventories are valued at lower of cost and
estimated net realizable value.
b) The basis of determining cost for various
categories of inventories are as follows:-
i) Raw Materials, Packing Materials &
Stores and Spares: Weighted average
basis.
ii) Finished Goods and work-in-progress:
Cost of Direct Material, Labour & Other
Manufacturing overheads.
j. Foreign Currency Transactions:
i) Foreign Currency Transactions are recorded
at exchange rates prevailing on the date of
such transaction.
ii) Any income or expense on account of
exchange difference either on settlement or on
translation is recognized in the Statement of
Profit and Loss except in case of long term
liabilities, where they relate to acquisition of
Fixed Assets, in which case they are adjusted
to the carrying cost of such assets.
iii) Premium/Discount in respect of Forward
Contract is amortised as expense/income
over the period of contract. Exchange
difference arising on forward contracts
between the exchange rate on the date of the
transaction and the exchange rate prevailing
at the year end is recognised in the statement
of profit and loss.
k. Revenue Recognition:
i) The company follows the mercantile system of
accounting and recognizes income and
expenditure on an accrual basis except those
with significant uncertainties.
ii) Sale of goods is recognised when the risk and
rewards of ownership are passed on to the
customers, which is generally on dispatch of
goods.
iii) Domestic sales as reported in the statement of
profit and loss are exclusive of tax/duties, if
any, and trade discounts. Income from export
entitlements is accounted as and when the
certainty of entitlement is determined.
iv) Dividend income is recognised when the right
to receive the dividend is unconditional at the
balance sheet date.
v) Interest income is recognised on a time
proportion basis taking into account the
amount outstanding and the rate applicable.
l. Taxes on Income:
i) Current tax on income is determined on the
basis of taxable income and tax credits
computed in accordance with the provisions
of the Income Tax Act 1961, and based on the
expected outcome of assessments/appeals.
ii) Deferred tax is recognised on timing
differences between the accounting income
and the taxable income for the year, and
quantified using the tax rates and laws
enacted or substantively enacted as on the
Balance Sheet date. Deferred tax assets are
recognised and carried forward to the extent
that there is a reasonable certainty that
sufficient future taxable income will be
available against which such deferred tax
assets can be realized. Deferred tax assets on
business loss and unabsorbed depreciation
are recognized and carried forward to the
extent that there is virtual certainty that
sufficient taxable income will be available
against which such deferred tax asset can be
realised.
iii) Minimum Alternative Tax (MAT) credit is
recognized as an asset only when and to the
extent there is convincing evidence that the
company will pay normal income tax during the
specified period. In the year in which the MAT
credit becomes eligible to be recognized as an
a s s e t i n a c c o r d a n c e w i t h t h e
recommendations contained in guidance note
issued by the Institute of Chartered
Accountants of India, the said asset is created
by way of a credit to the statement of profit and
loss and shown as MAT credit entitlement. The
company reviews the same at each balance
sheet date and writes down the carrying
amount of MAT credit entitlement to the extent
there is no longer convincing evidence to the
effect that company will pay normal income tax
during the specified period.
m. Employee Benefits:
i) Short-term employee benefits are recognised
as an expense at the un-discounted amount in
Notes on Financial Statements
37
the statement of profit and loss of the year in
which the related service is rendered.
ii) Post employment and other long term benefits
which are defined benefit plans are
recognised as an expense in the statement of
profit and loss for the year in which the
employee has rendered service. The expense
is recognised based on the present value of
the obligation determined in accordance with
Revised Accounting Standard 15 on
'Employee Benefits'. Actuarial gains & losses
are charged to the statement of profit and loss.
Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation, performed
by an independent actuary, at each balance
sheet date using the projected unit credit
method.
iii) Payments to defined contribution schemes
are charged as expense as and when
incurred.
iv) Termination benefits are recognised as an
expense as and when incurred.
n. Government grants and subsidies :
Grants and subsidies from the government are
recognised when there is a reasonable assurance
that the grant / subsidy will be received and all
attached conditions will be complied with. Grant
related to specific fixed assets are presented in the
Balance Sheet by showing such grant as deduction
from the fixed asset concerned. Grants received in
the nature of promoters contribution is credited to
capital reserve and treated as a part of
shareholders' fund. Grant in relation to
reimbursement of expenditure are credited to the
natural head of expenditure to which the grant
relates.
o. Earnings per share
Basic earnings per share are calculated by dividing
the net profit or loss for the period attributable to
equity shareholders (after deducting preference
dividends and attributable taxes if any) by the
weighted average number of equity shares
outstanding during the period. The weighted
average numbers of equity shares outstanding
during the period are adjusted for events of bonus
issue; bonus element in a rights issue to existing
shareholders; share split; and consolidation of
shares, if any. For the purpose of calculating diluted
earnings per share, the net profit or loss for the
period attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of all
dilutive potential equity shares.
p. Cash and cash equivalents
Cash flows are reported using the indirect method,
where by net profit before tax is adjusted for the
effects of transaction of a non cash nature and any
deferrals or accruals of past or future cash receipts
or payments. The cash flow comprises regular
revenue generating, investing and financing
activities of the company. Cash and cash
equivalents in the balance sheet comprise of cash at
bank and in hand and short term, highly liquid
investments having a initial maturity of 3 months or
less that are readily convertible into known amounts
of cash and which are subject to an insignificant risk
of changes in value.
q. Provisions and contingent liabilities
A provision is recognized if, as a result of a past
event, the company has a present legal obligation
that can be estimated reliably, and it is probable that
an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by
the best estimate of the outflow of economic benefits
required to settle the obligation at the reporting date.
Where no reliable estimate can be made, a
disclosure is made as contingent liability.
A disclosure for a contingent liability is also made
when there is a possible obligation or a present
obligation that may, but probably will not, require an
outflow of resources. Where there is a possible
obligation or a present obligation in respect of which
the likelihood of outflow of resources is remote, no
provision or disclosure is made.
Notes on Financial Statements
38
Notes on Financial Statements
As at31.03.2015
Lacs`
As at31.03.2016
Lacs`2.01 Share Capital
Authorised
Issued, Subscribed & fully Paid up
i)
ii)
2,00,00,000 Equity Shares of 10 each 2,000.00 2,000.00
(Previous year - 2,00,00,000 Equity Shares of 10 each)
120,00,000 Equity Shares of 10 each fully paid up 1,200.00 1,200.00
(Previous year - 1,20,00,000 Equity Shares of 10 each)
1,200.00 1,200.00 Terms/rights attached to equity shares :
The company has only one class of issued shares referred to as equity shares having a par value of
10 each. Each holder of equity shares is entitled to one vote per share. The dividend (except in case
of interim dividend) proposed by the Board of Directors, if any, is subject to the approval of
shareholders in the Annual General Meeting.
The reconciliation of the number of shares outstanding is set out below.
`
`
`
`
`
Equity Shares at the beginning of the year
Add: Equity Shares Issued during the year -
Equity Shares at the end of the year
1,20,00,000 1,200.00 1,20,00,000 1,200.00
- - -
1,20,00,000 1,200.00 1,20,00,000 1,200.00
Equity Shares
Number ` Lacs Number ` Lacs
As at 31.03.2016 As at 31.03. 2015
Equity Shares
No. of
Shares held
% of
holding
No. of
Shares held
% of
holding
As at 31.03.2016 As at 31.03.2015
iii) Details of shareholder's holding more than 5% of Shares :
iv) 40,00,000 shares were allotted as bonus shares by capitalisation of securities premium account
during the year 2013-14.
v) Details of Shares held by Holding Company :
There are no Shares held by Holding Company / Subsidiaries of ultimate Holding Company.
S. No. Name of Shareholder
1 D Sarath Chandran
2 Ashwin Chandran
3 Prashanth Chandran
28,41,108 23.68% 28,41,108 23.68%
23,07,457 19.23% 23,07,457 19.23%
19,71,891 16.43% 19,71,891 16.43%
39
Share Holders Funds
a Capital Reserve
Opening balance 748.19 48.19
Add: Addition during the year - 700.00
Closing balance 748.19 748.19
b Capital redemption Reserve
Opening balance / Closing Balance 355.00 355.00
c Securities Premium account
Opening balance / Closing Balance 2,736.46 2,736.46
d General Reserve
Opening balance / Closing balance 11,858.12 11,858.12
e Investment Fair Value Reserve
Opening balance - 1,322.16
Less : Deletion during the year - 1,322.16
Closing balance - -
f Hedging Reserve
Opening balance - (1,377.68)
Add : Addition during the year - 1,377.68
Closing balance - -
g Surplus in Statement of Profit and Loss
Opening balance (3,432.82) (141.39)
Add : (Loss) for the year (5,550.93) (3,263.54)
Less : Depreciation as per transition
provision in Note 7 (b) of Schedule II
of Companies Act, 2013 - (27.88)
Closing balance (8,983.75) (3,432.82)
6,714.02 12,264.95
Notes on Financial Statements
2.02 Reserves and Surplus
2.03 Long Term Borrowings
As at31.03.2015
Lacs`
As at31.03.2016
Lacs`
As at31.03.2015
Lacs`
As at31.03.2016
Lacs`
As at31.03.2015
Lacs`
As at31.03.2016
Lacs`
40
Secured
Term loans from Banks
- Rupee Loan 15,899.78 18,044.83 4,715.37 3,971.95
- Foreign Currency Loan - 201.54 - 389.09
Less: Amount disclosed under current maturities 4,715.37 4,361.04
15,899.78 18,246.37 - -
Non Current portion Current maturities
Notes on Financial Statements
1. Term loan from SBI, ICICI, Andhra Bank and Export Import Bank of India are secured by way of pari passu
first charge on entire movable and immovable assets of the company and pari passu second charge on
current assets of the company.
2. Term loan from ICICI Bank is secured by way of exclusive first charge on the assets of the Technical Textile
unit at Hassan, Karnataka and Second charge on the entire moveable fixed asset of the unit at Hassan,
ranking paripassu charge with ICICI bank's derivative limits for the unit at Hassan.
3. Corporate Loan from Axis Bank is secured by way of subservient charge over the movable fixed assets of
the company and exclusive charge on land and building of the corporate office and pledge of shares of
Pricol Limited shares held by the company.
4. In respect of the above, Rupee Term Loans carry interest ranging from 8.85% p.a. to 13.35% p.a.
5. The outstanding balance of :
Rupee term loan of 562.50 Lacs from Andhra Bank is repayable in 3 equal quarterly installments.
Rupee Tuf loan – IX of 123.64 Lacs from EXIM Bank is repayable in 3 equal quarterly installments.
Rupee Tuf loan – X of 500.76 Lacs from EXIM Bank is repayable in 5 equal quarterly installments.
Rupee Tuf loan – XI of ` 901.63 Lacs from EXIM Bank is repayable in 12 quarterly installments of varying
amounts.
Rupee Tuf loan – XII of 1567.63 Lacs from SBI is repayable in 7 quarterly installments of varying amounts.
Rupee Tuf loan XIII of 9504.00 Lacs from ICICI Bank is repayable in 11 half yearly installments of varying
amounts.
Rupee Tuf Loan – XIV of 1275.00 Lacs from EXIM Bank is repayable in 17 equal quarterly installments.
Rupee Tuf Loan – XV of ` 1680.00 Lacs from Andhra Bank is repayable in 20 equal quarterly installments
commencing from October '16.
Rupee Corporate Loan of ` 2500.00 Lacs from ICICI Bank is repayable in 20 equal quarterly installments
commencing from September '16.
Rupee Corporate Loan of ` 2000.00 Lacs from Axis Bank is repayable in 20 equal quarterly installments
commencing from December '17.
41
2.04 Other Long Term Liabilities
Derivative Liability 378.61 -
378.61 -
2.05 Long Term Provisions
Provision for employee benefits
Gratuity (Funded) (Refer note no: 2.40) 171.58 195.27
171.58 195.27
As at
31.03.2016
Lacs`
As at
31.03.2015
Lacs`
2.06 Short Term Borrowings
Secured
Working Capital Loans
From Banks
- Rupee Loan 5,697.34 4,346.49
- Foreign Currency Loan 5,801.54 6,497.26
Unsecured
From Bank
- Rupee Loan 7,793.75 4,884.54
19,292.63 15,728.29
As at
31.03.2016
Lacs`
As at
31.03.2015
Lacs`
1.Bank are secured by way of pari-passu first charge on current assets of the company and pari passu second charge on entire immovable assets of the company.
2. In respect of the above, working capital rupee loans carry interest ranging from 10.45% p.a. to 12.50% p.a. and working capital foreign currency loans carry interest ranging from 1.50% p.a. to 2.75% p.a. plus applicable LIBOR.
3. Unsecured short term loans from ICICI & IDBI Bank carrry interest at 9.60% and 9.75% p.a. respectively.
Working capital loans from SBI, Andhra Bank, Corporation Bank, IDBI,ICICI, and The South Indian
2.07 Trade Payables
29.18 -
2,021.05 1,642.39
Total outstanding dues of micro and small enterprises
Total outstanding dues of creditors other than micro and small enterprises
2,050.23 1,642.39
There are no interest amounts paid / payable to Micro and Small Enterprises. The information in relation to dues to
Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of
information available with the company, which has been relied upon by the auditors.
2.08 Other Current Liabilities
a) Current maturities of long-term debt ( Refer note no: 2.03 ) 4,715.37 4,361.04
b) Interest accrued but not due on borrowings 38.64 74.81
c) Unclaimed dividends 22.60 25.14
d) Accrued Employee benefits 913.39 749.44
e) Derivative liability 138.57 -
f) Temporary Over Draft from Banks 6.74 -
g) Statutory dues payable 432.42 201.16
h) Other Payables * 2,712.92 2,567.73
8,980.65 7,979.32
* Other Payables include expenses payable and advances from customers
2.09 Short Term Provisions
Provision for employee benefits
Gratuity (Funded) (Refer note no: 2.40) 84.84 94.83
84.84 94.83
Notes on Financial Statements
42
2.10 Fixed Assets
Non Current Assets
` Lacs
Notes on Financial Statements
Net Block
As at31.03.2016
Gross Block Depreciation and Amortization
As at01.04.2015
As at31.03.2016
Upto31.03.2015
For theYear
Adjustedagainstsurplus
Addition /Adjustments
duringthe year
Deductions /Retirement
duringthe year
Deduction /Adjustments
duringthe year
Particulars
Tangible Assets
Land 1,039.82 - 56.16 983.66 - - - - - 983.66
Building 10,100.21 41.17 7.31 10,134.07 2,372.64 274.29 - 1.29 2,645.64 7,488.43
Plant and Equipment 59,325.90 2,234.18 2,441.47 59,118.61 35,158.02 3,394.34 - 1,794.17 36,758.19 22,360.42
Vehicles 402.17 - - 402.17 179.96 31.07 - - 211.03 191.14
Office Furnitures 353.95 6.38 - 360.33 175.83 33.36 - - 209.19 151.14
Computer 540.17 12.50 - 552.67 453.09 42.28 - - 495.37 57.30
TOTAL (A) 71,762.22 2,294.23 2,504.94 71,551.51 38,339.54 3,775.34 - 1,795.46 40,319.42 31,232.09
Intangible Assets
Computer Software 417.38 14.44 - 431.82 317.17 24.50 - 341.67 90.15
TOTAL (B) 417.38 14.44 - 431.82 317.17 24.50 - - 341.67 90.15
TOTAL (A + B) 72,179.60 2,308.67 2,504.94 71,983.33 38,656.71 3,799.84 - 1,795.46 40,661.09 31,322.24
Net Block
As at31.03.2015
Gross Block Depreciation and Amortization
As at01.04.2014
As at31.03.2015
Upto31.03.2014
For theYear
Adjustedagainstsurplus
Addition /Adjustments
duringthe year
Deductions /Retirement
duringthe year
Deduction /Adjustments
duringthe year
Particulars
Tangible Assets
Land 1,075.60 - 35.78 1,039.82 - - - - - 1,039.82
Building 10,000.10 101.49 1.38 10,100.21 2,101.23 271.41 - - 2,372.64 7,727.57
Plant and Equipment 59,059.77 1,028.09 761.96 59,325.90 32,356.39 3,283.20 0.48 482.05 35,158.02 24,167.88
Vehicles 380.35 44.92 23.10 402.17 169.67 32.23 - 21.94 179.96 222.21
Office Furnitures 357.14 2.11 5.30 353.95 130.83 36.49 9.54 1.03 175.83 178.12
Computer 520.66 19.59 0.08 540.17 389.89 45.42 17.86 0.08 453.09 87.08
TOTAL (A) 71,393.62 1,196.20 827.60 71,762.22 35,148.01 3,668.75 27.88 505.10 38,339.54 33,422.68
Intangible Assets
Computer Software 414.37 3.01 - 417.38 294.43 22.74 - - 317.17 100.21
TOTAL (B) 414.37 3.01 - 417.38 294.43 22.74 - - 317.17 100.21
TOTAL (A + B) 71,807.99 1,199.21 827.60 72,179.60 35,442.44 3,691.49 27.88 505.10 38,656.71 33,522.89
Upto31.03.2015
Upto31.03.2016
43
2.11
A. Trade Investments
In Equity Shares - Unquoted, fully paid up at cost
1,00,000 Vantex Limited of 10 each 19.00 19.00
12,06,000 A.P. Gas Power Corporation Limited of 10 each 1,964.87 1,964.87
2,25,000 Sai Regency Power Corporation Private Limited of 10 each 22.50 22.50
(Previous year 2,25,000 shares of 10 each)
14,000 OPG Energy Private Limited of 10 each 1.40 1.40
Less : Diminution in the value of investment (475.58) (475.58)
Sub Total 1,532.19 1,532.19
B. Others Investments
In Equity Shares - Quoted, fully paid up
27,90,000 Pricol Limited of ` 1 each 101.00 101.00
Market value - ` 1194.12 lacs (Previous Year ` 843.98 lacs)
In Equity Shares of Subsidiary Companies - Unquoted, fully paid up at cost
2,50,000 Multiflora Processing Coimbatore Limited of ` 10 each
(extent of holding - 100%) 25.00 25.00
1,00,000 Suprem Textiles Processing Limited of ` 100 each
(extent of holding - 100%) 100.00 100.00
50,000 Precot Meridian Energy Limited of ` 10 each
(extent of holding - 100%) 5.00 5.00
In Equity Shares - Unquoted, fully paid up
100 Precot Mills Employees Cooperative Credit Society of ` 10 each 0.01 0.01
100 Precot Mills Multi purpose stores of ` 10 each 0.01 0.01
10,000 Cotton Sourcing Company Ltd of ` 10 each 1.00 1.00
In Partnership Firm * 9.90 9.90
Sub Total 241.92 241.92
Total (A + B) 1,774.11 1,774.11
Aggregate amount of quoted investments 101.00 101.00
Market value of quoted investments 1,194.12 843.98
Aggregate amount of unquoted investments 2,148.69 2,148.69
* Investment in Partnership Firm - Suprem Associates
Total Capital of the Firm 10.00 10.00
Share in the capital of the firm 9.90 9.90
Share of each partner in the profits of the Firm
Precot Meridian Limited 99% 99%
Suprem Textile Processing Limited 1% 1%
Non Current Investments
`
`
`
`
`
As at
31.03.2016
Lacs`
As at
31.03.2015
Lacs`
44
Notes on Financial Statements
Notes on Financial Statements
Unsecured, considered good
Capital Advances 141.96 72.57
Security Deposits 964.41 1,091.00
MAT Credit Receivable 894.25 894.25
Derivative Asset - 449.58
Tax Payments Pending Adjustments 472.87 574.72
Prepaid expenses 6.91 7.46
2,480.40 3,089.58
2.13 Inventories
a. Raw Materials and components(Includes goods in transit Nil ; PY ` 382.79 lacs ) 7,854.40 5,662.84
b. Work-in-progress 1,495.92 1,388.33
c. Finished goods 2,866.16 2,018.62
d. Waste cotton 70.99 173.99
e. Stores and spares 555.02 515.37
12,842.49 9,759.15
2.12 Long Term Loans and Advances
2.16 Short term loans and advances
Unsecured, considered good
Balance with Government authorities 230.97 310.76
Advance to trade suppliers 267.39 317.85
Prepaid expenses 286.57 309.13
Staff advances 60.01 61.91
Dues from Subsidiaries / related parties (Refer note no: 2.39) 34.74 33.74
Other Advances 18.44 27.28
898.12 1,060.67
45
2.14 Trade Receivables
Over six months
i) Unsecured, considered good 28.66 40.36
ii) Unsecured, considered doubtful 27.66 -
Less : Provision for bad & doubtful debts (27.66) - - -
Others : Unsecured considered good 4,647.68 4,024.65
4,676.34 4,065.01
As at
31.03.2016
Lacs`
As at
31.03.2015
Lacs`
Of the above, the balances that meet the definition of Cash and Cash equivalents as per AS 3 Cash flow Statement is ` 243.06 lacs (Previous Year ` 284.14 lacs)
2.15 Cash and Cash Equivalents
a) Balances with banks
In current accounts 219.35 280.74
In deposit accounts 19.20 -
In unclaimed dividend accounts 22.60 25.14
b) Cash on hand 4.51 3.40
265.66 309.28
2.17 Other Current Assets
Unsecured considered doubtful
Subsidy receivable from Government 2,136.11 190.93
Less: Provision for doubtful receivables 2,136.11 - 190.93 -
Unsecured considered good
Subsidy receivable from Government(Refer note no. 2.34) 220.04 3,271.89
Export incentives receivable 152.64 337.68
Income accrued 74.32 92.64
447.00 3,702.21
2.18 Revenue from Operations
A. Sale of Products - Manufactured Goods
Sale of Yarn 56,539.11 65,854.38
Sale of Technical Textile products 4,901.51 2,779.49
Sale of Fabrics 2,156.62 -
Sale of Products - Traded Goods
Sales of Yarn & Cotton 2,379.49 2,859.48
Total - A 65,976.73 71,493.35
B. Other operating revenue
Scrap Sales 659.49 1,609.38
Export Incentive 539.12 581.48
Processing Income 1,160.62 978.32
Others 32.64 32.31
Total - B 2,391.87 3,201.49
Total (A + B) 68,368.60 74,694.84
2.19 Other Income
Interest Income 141.26 99.04
Dividend - From long term investments - 11.16
Profit on sale of assets (net) 871.57 78.68
Insurance claim receipts 54.15 10.76
Miscellaneous Income 32.57 48.14
1,099.55 247.78
As at
31.03.2016
Lacs`
As at
31.03.2015
Lacs`
Notes on Financial Statements
46
2015 - 16
Lacs`
2014 - 15
Lacs`
Imported
Indigenous 100.00% 36,379.02 97.83% 41,258.02
100.00% 36,380.28 100.00% 42,174.79
0.00% 1.26 2.17% 916.77
% of consumption ` Lacs % of consumption ` Lacs
Particulars ofMaterials Consumed
2015 - 16 2014 - 15
Notes on Financial Statements
2.21 Changes in inventories of finished goods and work-in-progress
Inventory at the end of the year
Work in Progress and Waste Cotton 1,566.91 1,562.33
Finished Goods 2,866.16 2,018.62
4,433.07 3,580.95
Inventory at the beginning of the year
Work in Progress and Waste Cotton 1,562.33 3,361.33
Finished Goods 2,018.62 1,958.83
3,580.95 5,320.16
(Increase) / decrease in inventories (852.12) 1,739.21
2.22 Employee benefits expense
Salaries, Wages and Bonus 6,746.82 6,500.03
Contributions to Provident fund and other funds 527.93 523.01
Staff welfare expenses 539.05 557.17
7,813.80 7,580.21
2.23 Finance Costs
Interest expense 3,664.01 3,280.80
Other borrowing costs 100.95 81.61
3,764.96 3,362.41
2.24 Depreciation and Amortization
Depreciation - Refer note no. 2.10 3,775.35 3,668.75
Amortization of Intangible asset - Refer note no. 2.10 24.50 22.74
3,799.85 3,691.49
2.20 Cost of materials consumed :
Cotton 36,380.28 42,174.79
36,380.28 42,174.79
47
2015 - 16
Lacs`
2014 - 15
Lacs`
Notes on Financial Statements
2.25 Other Expenses
Consumption of Stores & Spares 2,709.28 2,189.53
Power & Utilities (net) Refer note no. 2.32 8,781.50 8,538.35
Processing Charges 302.86 139.26
Repairs and maintenance
Machinery 2,646.36 2,806.42
Building 330.11 488.40
Others 150.11 155.20
Rent, Rates and Taxes 37.66 58.61
Foreign Exchange loss (net) Refer note no. 2.38 1,155.17 157.86
Selling & Distribution expenses 2,943.14 2,913.87
Bank Charges 142.09 98.28
Communication Expenses 70.37 68.05
Travelling Expenses 100.15 113.87
Professional Charges 103.93 66.77
Auditor's Remuneration 15.70 14.94
Other Administrative expenses 353.97 374.17
Provision for doubtful receivables / advances 26.32 190.93
19,868.72 18,374.51
Payments to the auditor as
a) Auditor
- For Statutory Audit 8.25 7.00
- For Tax Audit 1.25 1.25
- For VAT Audit 1.50 1.50
b) For certification services 1.55 0.95
c) For others 0.25 1.75
d) For reimbursement of expenses 0.95 0.94
e) Service Tax 1.95 1.55
15.70 14.94
48
2015 - 16
Lacs`
2014 - 15
Lacs`
Notes on Financial Statements
2.26 Earnings per share
Net Profit / (Loss) after tax as per Statement of
Profit and Loss attributable to Equity Shareholders (5,550.93) (3,263.54)
Weighted Average number of equity shares used as denominator
for calculating EPS 1,20,00,000 1,20,00,000
Basic & Diluted Earnings / (Loss) per share (in ) (46.26) (27.20)
Face Value per equity share (in ) 10.00 10.00
2.27 Estimated amount of contracts remaining to be
executed on capital account and not provided for 35.29 321.27
2.28 Contingent liabilities in respect of :
Bills discounted 2,032.52 1,939.66
Guarantees 300.38 288.00
Letters of credit outstanding 60.30 -
2.29 a. Disputed Statutory Liabilities not provided for (excluding
interest & penalty, if any) 1,317.23 2,434.46
b. Disputed Other Liabilities not provided for (excluding
interest & penalty, if any) 59.74 59.74
2.30 Earnings in Foreign Exchange :
Export of Goods - FOB Value 21,388.68 21,907.68
2.31 Expenditure in Foreign Currency
a. CIF Value of Imports :
i Raw Materials - 844.15
ii Components and Spares 301.14 213.89
iii Capital Goods 186.14 491.10
b. Export Commission 185.20 201.12
c. Quality Claim 16.91 5.72
d. Interest 170.99 148.62
e. Others 24.05 11.64
884.43 1,916.24
`
`
49
a. Exchange difference capitalized during the year 20.25 33.10
b. Depreciation charged to Statement of Profit & Loss thereon 208.55 212.15
c. Remaining amount to be amortized* 453.70 662.25
* The company amortizes only 95% of the value of its fixed assets
As at
31.03.2016
Lacs`
As at
31.03.2015
Lacs`
Notes on Financial Statements
2.32 Power and utilities is net of wind power of 348.72 lacs (previous year 478.66 lacs) representing power
supplied to the grid against which equivalent consumption was made in house.
2.33 The Ministry of Corporate Affairs, through its notification dated March 31,2009 has relaxed the provisions of
Accounting Standard (AS) 11 The Effects of Changes in Foreign Exchange Rates for treating the
exchange gain/loss arising on restatement of long term foreign currency monetary items. Accordingly,
companies are permitted to adjust in their carrying cost of depreciable assets, the exchange differences
arising out of exchange rate fluctuations with corresponding adjustments in Statement of Profit & Loss and
general reserve in order to give effect to the aforesaid amendment, companies are required to exercise
their option. The company has exercised the option and the following adjustments have been made.
` `
2.34
` 2051.08 lacs) of interest subsidy on TUF scheme loans and 75 lacs (previous year 75 lacs) of grant
receivable for reimbursement of expenditure from Karnataka Government.
2.35 Net Deferred tax asset has not been recognised considering prudence.
2.36 a) Details of foreign currency exposure that are hedged by derivative instruments or otherwise :
Subsidy receivable from government (net of provisons) represents ` 145.04 lacs (previous year
50
Receivable covered by
Forward Contract EURO - 4.37 - 293.46
USD - 5.38 - 335.97
ParticularsForeign
Currency
2015-16 2014-15 2015-16 2014-15
Amount of ForeignCurrency in Lacs
Equivalent amount ofRs. in Lacs
b) Details of foreign currency exposure that are not hedged by derivative instruments or otherwise :
Trade Payables USD 0.04 - 2.55 -
EURO 0.02 - 1.86 -
Trade Receivables USD 12.46 12.74 825.46 796.05
EURO 7.62 2.63 574.29 176.87
GBP 0.25 0.28 22.89 25.70
PCFC USD 72.77 102.15 4820.76 6384.53
EURO 13.01 1.68 980.78 112.73
ECB USD - 9.45 - 590.63
Derivatives EURO 111.94 126.64 8437.18 8510.42
Commission on Exports - - - - - -
Dividend Received - - - - - 11.16
Advance for Expense 1.00 - - 1.01 - -
Remuneration - 167.90 - - 152.64 -
Purchase of spares - - 0.21 - - 0.10
Purchase of packing
materials - - - - - 0.24
Purchase of Waste - - 44.74 - - -
Sale of Yarn - - 92.26 - - 75.21
Sitting Fees - - 0.60 - - 0.60
Amount Outstanding
as at year end - Dr 34.74 - - 33.74 - -
FY 2015-16 FY 2014-15
Nature of TransactionsSubsidiaries SubsidiariesKMP Others KMP Others
Lacs`
Notes on Financial Statements
51
2.37 Exceptional item represents :
a) Provision for TUF Interest receivable - 1945.18 lacs (previous year Nil)
b) Profit on sale of long term investment - Nil (Previous year 1014.06 lacs)
c) Impact on account of discontinuation of AS 30 & 32 - Nil (Previous year - 458.57 lacs)
2.38 Foreign Exchange loss (net) includes foreign exchange loss arising out of restatement of foreign currency
assets / liabilities / derivatives amounting to 992.53 lacs (previous year - 150.68 lacs)
2.39 Related Party Disclosure :
List of related parties with whom transactions have taken place
Holding Co : Nil, Subsidiaries : Suprem Textiles Processing Limited, Multiflora Processing (CBE) Limited,
Precot Meridian Energy Limited, Suprem Associates (Partnership firm)
Key Management Personnel (KMP) : Mr. D Sarath Chandran, Mr. Ashwin Chandran and Mr. Prashanth
Chandran
Others: Pricol Limited, Pricol Packaging Limited, Premier Spinning & Weaving Mills Pvt Ltd and Mr. Vijay
Mohan .
Notes on Financial Statements
2.40 Disclosure report under AS15 (Revised 2005)
I. Principal Actuarial Assumptions
[Expressed as weighted averages]
Discount Rate 7.88% 7.84%
Salary escalation rate 3.00% 3.00%
Attrition rate 2.00% 2.00%
Expected rate of return on plan Assets 8.25% 8.25%
II. Changes in the present value of the obligation -
Reconciliation of opening and closing balances :
Present value of the obligation as at the beginning of the period 1378.25 1229.97
Interest cost 102.67 92.26
Current service cost 116.15 106.87
Past service cost - (non vested benefits) - -
Past service cost - (vested benefits) - -
Benefits paid (150.79) (106.32)
Actuarial loss / (gain) on obligation (balancing figure) (227.78) 55.47
Present Value of the Obligation as at the end of the period 1218.50 1378.25
III. Changes in the fair value of plan assets -
Reconciliation of opening and closing balances :
Fair value of plan assets as at the beginning of the period 1088.15 978.81
Expected return on plan assets 84.57 85.26
Contributions - -
Benefits paid (150.79) (106.32)
Actuarial gain / (loss) on plan assets (balancing figure) (59.85) 130.40
Fair value of plan assets as at the end of the period 962.08 1088.15
IV. Actual return on plan assets
Expected return on plan assets 84.57 85.26
Actuarial gain / (loss) on plan assets (59.85) 130.40
Actual return on plan assets 24.72 215.66
V. Actuarial gain / Loss recognized
Actuarial (gain) / loss for the period - Obligation (227.78) 55.47
Acturial gain / (loss) for the period - Plan assets (59.85) 130.40
Total (gain) / loss for the period (167.93) (74.93)
Actuarial (gain)/loss recognised in the period (167.93) (74.93)
Unrecognized actuarial (gain) / loss at the end of the year - -
VI. Amounts recognised in the balance sheet and related analysis
Present value of the obligation 1218.50 1378.25
Fair value of plan assets 962.08 1088.15
Difference 256.42 290.10
Unrecognised transitional liability - -
Unrecognised past service cost -non vested benefits - -
Liability recognised in the balance sheet 256.42 290.10
31.03.2016
Lacs`
31.03.2015
Lacs`
52
VII. Expense recognised in the statement of profit and loss
Current service cost 116.15 106.87
Interest cost 102.67 92.26
Expected return on plan assets (84.57) (85.26)
Net actuarial (gain)/ loss recognised in the year (167.93) (74.93)
Transitional liability recognised in the year - -
Past service cost-non-vested benefits - -
Past service cost-vested benefits - -
Expenses recognised in the statement of profit and loss (33.68) 38.94
VIII. Movements in the liability recognized in the balance sheet
Opening net liability 290.10 251.16
Expense as above (33.68) 38.94
Contribution paid - -
Closing net liability 256.42 290.10
Notes on Financial Statements
31.03.2016
Lacs`
31.03.2015
Lacs`
2.41 Disclosure as required under section 186(4) of the Companies Act, 2013 :
Loans given and Guarantees given by the company : Nil (Previous year : Nil)
Investments made are given under the respective head.
2.42 The amounts and disclosures included in the financial statements of the previous year have been
reclassified where ever necessary to conform to the current year's classification.
53
X. Major categories of plan assets (as percentage of total plan assets)
Fund managed by Insurer 100.00% 100.00%
Total 100.00% 100.00%
XI. Enterprise's Best Estimate of Contribution during Next Year NA NA
IX. Amount for the current period 31.3.2016 31.03.2015 31.03.2014 31.03.2013 31.03.2012
Present Value of obligation 1378.25 1155.92 1042.24
Plan Assets 1088.15 926.61 887.94
Surplus / (Deficit) (290.10) (229.31) (154.30)
Experience adjustments on
plan liabilities - (Loss)/Gain 64.20 (54.95) (91.01)
Experience adjustments on
plan assets - (Loss)/Gain 122.65 (0.05) (47.18)
1218.50 1229.97
962.08 978.81
(256.42) (251.16)
(223.80) 14.18
(59.85) 46.77
Vide our report of even date attachedFor Haribhakti & Co. LLPChartered Accountants
Firm Reg.No.: 103523WC S SathyanarayananPartnerM.No. : 028328Place : CoimbatoreDate : 28-May-2016
ICAI
D Sarath ChandranChairman
(DIN : 00001885)
Ashwin ChandranVice Chairman and Managing Director
(DIN : 00001884)
M R Siva ShankarChief Financial Officer
R Nithya PrabhuCompany Secretary
For and on behalf of the directors
A. Cash Flow from Operating Activities
Net Profit Before Tax and Extraordinary Items (3,605.75)
Adjustments for :
Depreciation 3,799.85
4,606.80
Operating Profit before working capital changes 1,001.05
Adjustments for :
1,650.57
Cash generated from Operations 2,651.62
Direct Taxes (paid) / Refunds 101.84
Net Cash Flow from Operating Activities 2,753.46
B. Cash Flow from Investing Activities
Purchase of Fixed Assets (Including WIP) (2,308.67)
Net Cash flow from / (used in) Investing Activities (565.50)
C. Cash Flow from Financing Activities
Proceeds / (
Proceeds /
Net Cash Flow used in Financing Activities (2,231.58)
Net Increase / (Decrease) in Cash and Cash Equivalents (43.62)
Cash and Bank Balances as at1.4.2015 and 1.4.2014 (opening balance) 309.28
Less: Bank balances not considered as cash andcash equivalents as per Accounting Standard 3 22.60
Cash and Cash Equivalents as at243.06
(4,717.26)
3,691.49
(Profit) / Loss on Sale of Assets (871.57) (78.68)
Exceptional items (1,945.18) 458.57
Investment Income - Dividend - (11.16)
Interest Income (141.26) (99.04)
Interest Payment 3,764.96 3,362.41
7,323.59
2,606.33
Trade Receivabes (611.34) 279.43
Other Receivables 3,906.77 (1,536.71)
Inventories (3,083.33) 8,906.41
Trade Payables 1,438.47 (1,060.01)
6,589.12
9,195.45
(43.59)
9,151.86
(1,243.94)
Sale of Fixed Assets 1,583.59 401.18
(Purchase) / Sale of Investments - 1,152.14
Proceeds from capital investment subsidy - 700.00
Interest Received 159.58 127.17
Dividend Received - 11.16
1147.71
Dividends Paid (Including Dividend Tax) (2.54) (280.59)
Interest Paid (net) (3.801.13) (3,582.65)
Repayments of Long Term Borrowings (1,992.25) (1,317.43)
Repayments) of Unsecured Loan 2,909.21 (2,527.43)
Repayments of working capital borrowings 655.13 (2,648.05)
(10,356.15)
(56.58)
365.85
25.14
31.3.2016 and 31.3.2015 (closing balance ) 284.14
2014 - 15 Lacs`
2015 - 16 Lacs`
Cash Flow Statement
54
Vide our report of even date attachedFor Haribhakti & Co. LLPChartered Accountants
Firm Reg.No.: 103523WC S SathyanarayananPartnerM.No. : 028328Place : CoimbatoreDate : 28-May-2016
ICAI
D Sarath ChandranChairman
(DIN : 00001885)
Ashwin ChandranVice Chairman and Managing Director
(DIN : 00001884)
M R Siva ShankarChief Financial Officer
R Nithya PrabhuCompany Secretary
For and on behalf of the directors
Standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Holding
Company's preparation of the consolidated financial statements
that give a true and fair view in order to design audit procedures that
are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the Holding
Company's Board of Directors, as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence obtained by us is sufficient and
appropriate to provide a basis for our audit opinion on the
consolidated financial statements.
Opinion
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid consolidated financial
statements give the information required by the Act in the manner
so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the
consolidated state of affairs of the Group, as at 31st March, 2016,
their consolidated loss and their consolidated cash flows for the
year ended on that date.
Other Matter
a) We did not audit the financial statement of one subsidiary,
whose financial statement reflects total assets(net) of
` 10.00 Lacs as at March 31, 2016, total revenues of Nil and
net cash flows amounting to Nil for the year ended on that
date, as considered in the consolidated financial
statements. These financial statement are unaudited and
have been furnished to us by the Management and our
opinion on the consolidated financial statements, in so far as
it relates to the amounts and disclosures included in respect
of this subsidiary, and our report in terms of sub-sections
(3) and (11) of Section 143 of the Act, in so far as it relates to
the aforesaid subsidiary, is based solely on such unaudited
financial statement. In our opinion and according to the
information and explanations given to us by the
Management, this financial information is not material
to the Group.
To the Members of Precot Meridian Limited
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial
statements of Precot Meridian Limited (hereinafter referred to as
"the Holding Company") and its subsidiaries (the Holding Company
and its subsidiaries together referred to as "the Group"),
comprising of the Consolidated Balance Sheet as at March 31,
2016, the Consolidated Statement of Profit and Loss and the
Consolidated Cash Flow Statement for the year then ended, and a
summary of the significant accounting policies and other
explanatory information (hereinafter referred to as "the
Consolidated Financial Statements").
Management's Responsibility for the Consolidated Financial
Statements
The Holding Company's Board of Directors is responsible for the
preparation of these consolidated financial statements in terms of
the requirements of the Companies Act, 2013 (hereinafter referred
to as "the Act") that give a true and fair view of the consolidated
financial position, consolidated financial performance and
consolidated cash flows of the Group in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014. The
respective Board of Directors of the companies included in the
Group are responsible for maintenance of adequate accounting
records in accordance with the provisions of the Act for
safeguarding the assets of the Group and for preventing and
detecting frauds and other irregularities; the selection and
application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether
due to fraud or error, which have been used for the purpose of
preparation of the consolidated financial statements by the
Directors of the Holding Company, as aforesaid.
Auditors' Responsibility
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. While conducting the
audit, we have taken into account the provisions of the Act, the
accounting and auditing standards and matters which are required
to be included in the audit report under the provisions of the Act and
the Rules made thereunder.
We conducted our audit in accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those
Auditors Report
55
financial position of the Group Refer Note 2.29 to the
consolidated financial statements;
ii) Provision has been made in the consolidated
financial statements, as required under the applicable
law or accounting standards, for material foreseeable
losses, if any, on long-term contracts including
derivative contracts - Refer Note 2.04 to the
consolidated financial statements in respect of such
items as it relates to the Group;
iii) There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Holding Company and its
subsidiaries companies incorporated in India.
Our opinion on the consolidated financial statements and
our report on the Other Legal and Regulatory Requirements
below, is not modified in respect of the above matters with
respect to the financial information certified by the
management.
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, we report, to the extent
applicable, that:
a. We have sought and obtained all the information and
explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit of the aforesaid
consolidated financial statements;
b. In our opinion, proper books of account as required by law
relating to preparation of the aforesaid consolidated
financial statements have been kept by the Company so far
as it appears from our examination of those books.
c. The Consolidated Balance Sheet, the Consolidated
Statement of Profit and Loss and the Consolidated Cash
Flow Statement dealt with by this Report are in agreement
with the relevant books of account maintained for the
purpose of preparation of the consolidated financial
statements;
d. In our opinion, the aforesaid consolidated financial
statements comply with the Accounting Standards specified
under Section 133 of the Act read with Rule 7 of the
Companies (Accounts) Rules, 2014;
e. On the basis of written representations received from the
directors of the Holding Company as on March 31, 2016
taken on record by the Board of Directors of the Holding
Company and the reports of the statutory auditors of the
subsidiaries companies, none of the directors of the Group
companies incorporated in India is disqualified as on March
31, 2016 from being appointed as a director in terms of
Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial
controls over financial reporting of the the Group, and the
operating effectiveness of such controls, we give our
separate Report in the "Annexure".
g. With respect to the other matters to be included in the
Auditor's Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the
explanations given to us:
i) The consolidated financial statements disclose the
impact of pending litigations on the consolidated
Auditors Report
Place : CoimbatoreDate : 28-May-2016
For Haribhakti & Co. LLPChartered Accountants
ICAI Firm Reg.No.: 103523WC S Sathyanarayanan
PartnerM.No.: 028328
56
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to under 'Report on Other Legal and Regulatory Requirements' in
the Independent Auditor's Report of even date to the members of Precot
Meridian Limited on the consolidated financial statements for the year
ended 31st March 2016.]
Report on the Internal Financial Controls under Clause (i) of Sub-
section 3 of Section 143 of the Companies Act, 2013 ("the Act")
In conjunction with our audit of the consolidated financial statements of the
Company as of and for the year ended March 31, 2016, We have audited
the internal financial controls over financial reporting of the, Holding
company and its subsidiary companies incorporated in India, as of that
date.
Management's Responsibility for Internal Financial Controls
The respective Board of Directors of the Group, which are companies
incorporated in India, are responsible for establishing and maintaining
internal financial controls based on the internal control over financial
reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute
of Chartered Accountants of India (ICAI). These responsibilities include the
design, implementation and maintenance of adequate internal financial
controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to the respective company's
policies, the safeguarding of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as
required under the Companies Act, 2013.
Auditor's Responsibility
Our responsibility is to express an opinion on the Company's internal
financial controls over financial reporting based on our audit. We conducted
our audit in accordance with the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting (the "Guidance Note") and the
Standards on Auditing specified under section 143(10) of the Act, to the
extent applicable to an audit of internal financial controls, both issued by the
ICAI. Those Standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether adequate internal financial controls over financial
reporting was established and maintained and if such controls operated
effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about
the adequacy of the internal financial controls system over financial
reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial
reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control
based on the assessed risk. The procedures selected depend on the
auditor's judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence
obtained by the other auditors in terms of their reports referred to in the
Other Matters paragraph below, is sufficient and appropriate to provide a
basis for our audit opinion on the Company's internal financial controls
system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A
company's internal financial control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorisations of management and
directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or
disposition of the company's assets that could have a material effect on the
financial statements.
Inherent Limitations of Internal Financial Controls Over Financial
Reporting
Because of the inherent limitations of internal financial controls over
financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or
fraud may occur and not be detected. Also, projections of any evaluation of
the internal financial controls over financial reporting to future periods are
subject to the risk that the internal financial control over financial reporting
may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Holding Company and its subsidiary companies
incorporated in India, have, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial
controls over financial reporting were operating effectively as at March 31,
2016, based on the internal control over financial reporting criteria
established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting issued by the ICAI.
Other Matters
Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy
and operating effectiveness of the internal financial controls over financial
reporting in so far as it relates to 3 subsidiary companies incorporated in
India, is based on the corresponding reports issued by us.
Place : CoimbatoreDate : 28-May-2016
For Haribhakti & Co. LLPChartered Accountants
ICAI Firm Reg.No.: 103523WC S Sathyanarayanan
PartnerM.No.: 028328
57
Auditors Report
As at As at
Note 31.03.2016 31.03.2015
Equity and Liabilities ` Lacs ` Lacs
Shareholders' funds
Share Capital 2.01 1,200.00 1,200.00
Reserves and Surplus 2.02 6,622.44 12,174.47
7,822.44 13,374.47
Non-current liabilities
Long Term Borrowings 2.03 15,899.78 18,246.37
Other Long Term Liablities 2.04 378.61 -
Long Term Provisions 2.05 171.58 195.27
16,449.97 18,441.64
Current Liabilities
Short Term Borrowings 2.06 19,292.63 15,728.29
Trade Payables 2.07
Total outstanding dues of micro andsmall enterprises 29.18 -
Total outstanding dues of creditorsother than micro and small enterprises 2,021.05 1,642.38
Other Current Liabilities 2.08 8,981.07 7,979.73
Short Term Provisions 2.09 84.84 94.83
30,408.77 25,445.23
54,681.18 57,261.34
Assets
Non-current Assets
Fixed Assets
Tangible Assets 2.10 31,313.48 33,504.08
Intangible Assets 2.10 90.14 100.21
Capital Work-in-progress 65.98 68.52
Non-current Investments 2.11 1,636.09 1,636.09
Long Term loans and advances 2.12 2,480.40 3,089.59
35,586.09 38,398.49
Current Assets
Inventories 2.13 12,842.49 9,759.15
Trade receivables 2.14 4,676.34 4,065.01
Cash and bank balances 2.15 265.88 309.56
Short Term loans and advances 2.16 863.38 1,026.92
Other current assets 2.17 447.00 3,702.21
19,095.09 18,862.85
54,681.18 57,261.34Significant Accounting Policies and Notes on Financial Statements 1 & 2.01 to 2.44The accompanying notes form an integral part of financial statements
Consolidated Balance Sheet
58
Vide our report of even date attachedFor Haribhakti & Co. LLPChartered Accountants
Firm Reg.No.: 103523WC S SathyanarayananPartnerM.No. : 028328Place : CoimbatoreDate : 28-May-2016
ICAI
D Sarath ChandranChairman
(DIN : 00001885)
Ashwin ChandranVice Chairman and Managing Director
(DIN : 00001884)
M R Siva ShankarChief Financial Officer
R Nithya PrabhuCompany Secretary
For and on behalf of the directors
Consolidated Statement of Profit and loss
Significant Accounting Policies and Notes on Financial Statements 1 & 2.01 to 2.44The accompanying notes form an integral part of financial statements
Note 2015-16 2014-15
Lacs Lacs` `
Revenue From Operations 2.18 68,368.60 74,694.84
Other income 2.19 1,099.55 248.62
Total Revenue 69,468.15 74,943.46
Expenses
Cost of materials consumed 2.20 36,380.27 42,174.79
Changes in inventories of finishedgoods and work-in-progress 2.21 (852.12) 1,739.21
Purchase of Traded Goods 2,298.41 2,737.26
Employee benefits expense 2.22 7,813.80 7,580.15
Finance costs 2.23 3,764.96 3,362.41
Depreciation and amortization expense 2.24 3,799.85 3,691.49
Other expenses 2.25 19,869.83 18,375.78
Total Expenses 73,075.00 79,661.09
Profit / ( Loss ) before exceptional items (3,606.85) (4,717.63)
Exceptional items 2.37 (1,945.18) 1,472.63
Profit / ( Loss ) before tax (5,552.03) (3,245.00)
Tax expense :
Current tax - -
For earlier year - -
MAT Credit - -
Deferred tax - 18.91
Profit / ( Loss ) for the year (5,552.03) (3,263.91)
Earnings per equity share (Nominal value of Share ` 10) 2.26 (46.27) (27.20)
Vide our report of even date attachedFor Haribhakti & Co. LLPChartered Accountants
Firm Reg.No.: 103523WC S SathyanarayananPartnerM.No. : 028328Place : CoimbatoreDate : 28-May-2016
ICAI
D Sarath ChandranChairman
(DIN : 00001885)
Ashwin ChandranVice Chairman and Managing Director
(DIN : 00001884)
M R Siva ShankarChief Financial Officer
R Nithya PrabhuCompany Secretary
For and on behalf of the directors
59
stNOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH
2016
I. Significant Accounting Policies to the Consolidated Financial
Statement
I. Principles of consolidation
The consolidated financial statements relate to Precot Meridian Ltd (the
"company") and its subsidiary companies. The consolidated financial
statements have been prepared on the following basis :
i) The financial statements of the company and its subsidiary
companies are combined on a line by line basis by adding together
the book values of like items of assets, liabilities, income and
expenses, after fully eliminating intra group balances and intra
group transactions resulting in unrealised profit or losses in
accordance with Accounting Standard (AS)21 "Consolidated
Financial Statements" issued by the Institute of Chartered
Accountants of India.
ii) The difference between cost of investment in the subsidiaries, over
the net assets at the time of acquisition of shares in the subsidiaries
is recognised in the financial statements as Goodwill or Capital
Reserve as the case may be.
iii) As far as possible, the consolidated financial statements are
prepared using accounting policies for like transactions and other
events in similar circumstances and are presented in the same
manner as the company's separate financial statements.
II. Significant Accounting Policies
a. Accounting Convention:
The financial Statements have been prepared to comply in all material
respects with the accounting standards specified under section 133 of the
Companies Act read with rule 7 of the companies (Accounting Standards)
Rules, 2014 and the relevant provisions of the companies Act, 2013. The
Financial Statements have been prepared under the historical cost
convention on an accrual basis. This accounting policy has been
consistently applied by the company with those used in the previous year.
b. Use of Estimates
The preparation of financial statements requires the management of the
company to make estimates and assumptions that affect the reported
balances of Assets and Liabilities and disclosures relating to the contingent
liabilities as at the date of the financial statements and reported amounts of
income and expenses during the year. Examples of such estimates include
provision for doubtful debts, employees' retirement benefit plan, provision
for income and other taxes, useful life of fixed assets, etc. Actual results
could differ from the estimates made. Any revision to accounting estimates
is recognized prospectively in the year in which the events are materialized.
c. Fixed Assets :
Fixed Assets are stated at original cost net of tax/duty credits availed, if any,
less accumulated depreciation, accumulated amortisation and cumulative
impairment if any. Costs include preoperative expenses, applicable
borrowing cost, exchange gain/loss on restatement of long term foreign
currency liability and all expenses related to acquisition and installation of
the assets concerned.
d. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at
cost. Following initial recognition, intangible assets are carried at cost less
accumulated amortisation and accumulated impairment losses, if any.
Internally generated intangible assets, excluding capitalised development
costs, are not capitalised and expenditure is reflected in the statement of
profit and loss in the year in which the expenditure is incurred.
e. Depreciation & Amortisation
Depreciation is provided on straight line Method based on the useful life as
Specified in schedule II of the Companies Act, 2013, except in respect of
plant and Machinery where the useful life estimated to be 20 years (10 years
on triple shift basis) based on technical evaluation. Intangible assets are
amortized on a straight line basis over the estimated useful economic life.
Where the cost of part of the asset is significant to the total cost of the asset
and if the part of the asset has a different useful life than the main asset,
useful life of that part is determined separately for depreciation.
f. Impairment of Assets:
The carrying amount of assets are reviewed, as at each balance sheet date,
to determine if there is any indication of impairment based on
internal/external factors. An asset is treated as impaired when the carrying
cost of the asset exceeds its recoverable value. The recoverable amount is
greater of the asset's net selling price and value in use. In assessing the
value in use, the estimated future cash flows as a cash generating unit are
discounted to the present value. An impairment loss is charged to the
statement of profit and loss in the year in which an asset is identified as
impaired.
g. Borrowing Costs:
Borrowing Costs attributable to the acquisition or construction of qualifying
assets are capitalized as part of such assets. All the other borrowing costs
are charged to revenue. A qualifying asset is an asset that necessarily
requires a substantial period of time to get ready for its intended use or sale.
h. Investments :
a. Long Term Investments other than in subsidiaries and associates
have been accounted as per accounting standard
13 on Accounting for Investments .
b. Provision for diminution in value of long-term investments is made,
if the diminution is other than temporary.
i. Inventories :
a) Inventories are valued at lower of cost and estimated net realizable
value.
b) The basis of determining cost for various categories of inventories
are as follows:-
i) Raw Materials, Packing Materials & Stores and Spares:
Weighted average basis.
ii) Finished Goods and Work-in-Progress: Cost of Direct
Material, Labour & Other Manufacturing Overheads.
j. Foreign Currency Transactions:
i) Foreign Currency Transactions are recorded at exchange rates
prevailing on the date of such transaction.
ii) Any income or expense on account of exchange difference either
on settlement or on translation is recognized in the Profit and Loss
Statement, except in case of long term liabilities, where they relate
to acquisition of Fixed Assets, in which case they are adjusted to
the carrying cost of such assets.
iii) Premium/Discount in respect of Forward Contract is amortised as
expense/income over the period of contract. Exchange difference
arising on forward contracts between the exchange rate on the
date of the transaction and the exchange rate prevailing at the year
end is recognised in the statement of profit and loss.
k. Revenue Recognition:
i) The company follows the mercantile system of accounting and
recognizes income and expenditure on an accrual basis except
those with significant uncertainties.
ii) Sale of goods is recognised when the risk and rewards of
Consolidated Financial Statements
60
ownership are passed on to the customers, which is generally on
dispatch of goods.
iii) Domestic sales as reported in the statement of profit and loss are
exclusive of tax/duties, if any, and trade discounts. Income from
Export entitlements is accounted as and when the certainty of
entitlement is determined.
iv) Dividend income is recognised when the right to receive the
dividend is unconditional at the balance sheet date.
v) Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
l. Taxes on Income:
i) Current Tax on income is determined on the basis of taxable
income and tax credits computed in accordance with the
provisions of the Income Tax Act 1961, and based on the expected
outcome of assessments/appeals.
ii) Deferred tax is recognised on timing differences between the
accounting income and the taxable income for the year, and
quantified using the tax rates and laws enacted or substantively
enacted as on the Balance Sheet date. Deferred tax assets are
recognised and carried forward to the extent that there is a
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Deferred tax assets on business loss and unabsorbed
depreciation are recognized and carried forward to the extent that
there is virtual certainty that sufficient taxable income will be
available against which such deferred tax asset can be realised.
iii) Minimum Alternative Tax (MAT) credit is recognized as an asset
only when and to the extent there is convincing evidence that the
company will pay normal income tax during the specified period. In
the year in which the MAT credit becomes eligible to be recognized
as an asset in accordance with the recommendations contained in
guidance note issued by the Institute of Chartered Accountants of
India, the said asset is created by way of a credit to the statement of
profit and loss and shown as MAT credit entitlement. The company
reviews the same at each balance sheet date and writes down the
carrying amount of MAT credit entitlement to the extent there is no
longer convincing evidence to the effect that company will pay
normal income tax during the specified period.
m. Employee Benefits :
i) Short-term employee benefits are recognised as an expense at the
un-discounted amount in the statement of profit and loss of the
year in which the related service is rendered.
ii) Post employment and other long term benefits which are defined
benefit plans are recognised as an expense in the statement of
profit and loss for the year in which the employee has rendered
service. The expense is recognised based on the present value of
the obligation determined in accordance with Revised Accounting
Standard 15 on 'Employee Benefits'. Actuarial gains & losses are
charged to the statement of profit and loss. Liabilities with regard
to the Gratuity Plan are determined by acturial valuation,
performed by an independent actuary, at each balance sheet date
using the projected unit credit method.
iii) Payments to defined contribution schemes are charged as
expense as and when incurred.
iv) Termination benefits are recognised as an expense as and when
incurred.
n. Government grants and subsidies:
Grants and subsidies from the government are recognised when there is a
reasonable assurance that the grant / subsidy will be received and all
attached conditions will be complied with. Grant related to specific fixed
assets are presented in the Balance sheet by showing such grant as
deduction from the fixed asset concerned. Grants received in the nature of
promoters contribution is credited to capital reserve and treated as a part of
shareholders' fund. Grant in relation to reimbursement of expenditure are
credited to the natural head of Expenditure to which the grant relate.
o. Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for
the period attributable to equity shareholders (after deducting preference
dividends and attributable taxes if any) by the weighted average number of
equity shares outstanding during the period. The weighted average
numbers of equity shares outstanding during the period are adjusted for
events of bonus issue; bonus element in a rights issue to existing
shareholders; share split; and consolidation of shares if any. For the
purpose of calculating diluted earnings per share, the net profit or loss for
the period attributable to equity shareholders and the weighted average
number of shares outstanding during the period are adjusted for the effects
of all dilutive potential equity shares.
p. Cash and cash equivalents
Cash flow are reported using the indirect method, where by net profit before
tax is adjusted for the effects of transaction of a non cash nature and any
deferrals or accruals of past or future cash receipts or payments. The cash
flow comprises regular revenue generating, investing and financing
activities of the company. Cash and cash equivalents in the balance sheet
comprise of cash at bank and in hand and short term, highly liquid
investments having a initial maturity of 3 months or less that are readily
convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value.
q. Provisions and contingent liabilities
A provision is recognized if, as a result of a past event, the company has a
present legal obligation that can be estimated reliably, and it is probable that
an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by the best estimate of the outflow of economic
benefits required to settle the obligation at the reporting date. Where no
reliable estimate can be made, a disclosure is made as contingent liability.
A disclosure for a contingent liability is also made when there is a possible
obligation or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources is
remote, no provision or disclosure is made.
r. The names of subsidiaries/firms considered in the consolidated financial statements are:
Name of subsidiary Country of % of ownership Reporting date
a) Suprem Textiles Processing Ltd India 100 31.03.2016
b) Multiflora Processing (Coimbatore) Ltd India 100 31.03.2016
c) Precot Meridian Energy Ltd India 100 31.03.2016
d) Suprem Associates - Firm India 100 31.03.2016
Incorporation
61
Consolidated Financial Statements
Equity Shares at the beginning of the year
Add: Shares Issued during the year
Equity Shares at the end of the year
1,20,00,000 1,200.00 1,20,00,000 1,200.00
- - - -
1,20,00,000 1,200.00 1,20,00,000 1,200.00
Equity Shares
Number ` Lacs Number ` Lacs
As at 31.03.2016 As at 31.03. 2015
Equity Shares
No. of
Shares held
% of
holding
No. of
Shares held
% of
holding
As at 31.03.2016 As at 31.03. 2015
iii) The details of Shareholders holding more than 5% of Shares :
iv) 40,00,000 shares were allotted as bonus shares by capitalisation of securities premium account during
the year 2013-14.
v) Details of Shares held by Holding Company :
There are no Shares held by Holding Company / Subsidiaries of ultimate Holding Company.
S. No. Name of Shareholder
1 D Sarath Chandran 23.68 23.68
2 Ashwin Chandran 19.23 19.23
3 Prashanth Chandran 16.43 16.43
28,41,108 28,41,108
23,07,457 23,07,457
19,71,891 19,71,891
ii) The reconciliation of the number of shares outstanding is set out below:
2.01 Share Capital
Authorised
2,00,00,000 Equity Shares of 10 each 2,000.00 2,000.00
Issued, Subscribed & fully Paid up
1,20,00,000 Equity Shares of 10 each fully paid up
1,200.00 1,200.00
1,200.00 1,200.00i) Terms/rights attached to equity shares :
The company has only one class of issued shares referred to as equity shares having a par value of
10 each. Each holder of equity shares is entitled to one vote per share. The dividend (except in case
of interim dividend) proposed by the Board of Directors, if any, is subject to the approval of
shareholders in the Annual General Meeting.
`
`
`
`
(Previous year - 2,00,00,000 Equity Shares of 10 each)
(Previous year - 1,20,00,000 Equity Shares of 10 each)
As at
31.03.2016
Lacs`
As at
31.03.2015
Lacs`
Consolidated Financial Statement
62
Shareholders Funds
Secured
Term loans from Banks
Rupee Loan
Foreign Currency Loan
Less : Amount disclosed under current maturities 4,715.37 4,361.04
15,899.78 18,044.83 4,715.37 3,971.95
- 201.54 - 389.09
15,899.78 18,246.37 - -
2.03 Long Term Borrowings
Non Current Liabilities
As at
31.03.2016
As at
31.03.2015
As at
31.03.2016
As at
31.03.2015
Non Current portion Current maturities
Lacs`
As at
31.03.2016
Lacs`
As at
31.03. 2015
Lacs`
Consolidated Financial Statements
2.02 Reserves and Surplus
a Capital Reserve
Opening balance 748.19 48.19
Add: Addition during the year - 700.00
Closing balance 748.19 748.19
b Capital redemption Reserve
Opening balance / Closing Balance 355.00 355.00
c Securities Premium account
Opening balance / Closing balance 2,736.46 2,736.46
d General Reserve
Opening balance / Closing balance 11,858.12 11,858.12
e Investment Fair Value Reserve
Opening balance - 1,322.16
Add : Addition during the year - 1,322.16
Closing balance - -
f Hedging Reserve
Opening balance - (1,377.68)
Add : Additions during the year - 1,377.68
Closing balance - -
g Surplus in Statement of Profit and Loss
Opening balance (3,523.30) (229.07)
Add : (Loss) for the year (5,552.03) (3,263.91)
Less : Deletion during the year - 2.44
Less : Depreciation as per transition provision in
Note 7 (b) of Schedule II of Companies Act, 2013 - (27.88)
Amount available for appropriation (9,075.33) (3,523.30)
Closing balance (9,075.33) (3,523.30)
6,622.44 12,174.47
63
2.06 Short Term Borrowings
Secured
Working Capital Loans
From Banks
- Rupee Loan 5,697.34 4,346.49
- Foreign Currency Loan 5,801.54 6,497.26
Unsecured
From Bank
- Rupee Loan 7,793.75 4,884.54
19,292.63 15,728.29
1.
company and pari passu second charge on current assets of the company.
2. Corporate Loan from Axis Bank is secured by way of subservient charge over the movable fixed assets of the company and exclusive charge on land and building of the
corporate office and pledge of shares of Pricol Limited shares held by the company.
3. Term loan from ICICI Bank is secured by way of exclusive first charge on the assets of the Technical Textile unit at Hassan, Karnataka and Second charge on the entire
movable fixed asset of the unit at Hassan, ranking paripassu charge with ICICI bank's derivative limits for the unit at Hassan
4. In respect of the above, Rupee Term Loans carry interest ranging from 8.85% p.a. to 13.35% p.a.
5. The outstanding balance of :
Rupee term loan of 562.50 Lacs from Andhra Bank is repayable in 3 equal quarterly installments.
Rupee Tuf loan – IX of 123.64 Lacs from EXIM Bank is repayable in 3 equal quarterly installments.
Rupee Tuf loan – X of 500.76 Lacs from EXIM Bank is repayable in 5 equal quarterly installments.
Rupee Tuf loan – XI of 901.63 Lacs from EXIM Bank is repayable in 12 quarterly installments of varying amounts.
Rupee Tuf loan – XII of 1567.63 Lacs from SBI is repayable in 7 quarterly installments of varying amounts.
Rupee Tuf loan XIII of 9504.00 Lacs from ICICI Bank is repayable in 11 half yearly installments of varying amounts.
Rupee Tuf Loan – XIV of 1275.00 Lacs from EXIM Bank is repayable in 17 equal quarterly installments.
Rupee Tuf Loan – XV of 1680.00 Lacs from Andhra Bank is repayable in 20 equal quarterly installments commencing from October'16.
Rupee Corporate Loan of 2500.00 Lacs from ICICI Bank is repayable in 20 equal quarterly installments commencing from September'16.
Rupee Corporate Loan of 2000.00 Lacs from Axis Bank is repayable in 20 equal quarterly installments commencing from December'17.
Term loan from SBI, ICICI, Andhra Bank and Export Import Bank of India are secured by way of pari passu first charge on entire movable and immovable assets of the
Consolidated Financial Statements
As at
31.03.2016
Lacs`
As at
31.03.2015
Lacs`
2.05 Long Term Provisions
Provision for employee benefits
Gratuity (Funded) Refer note no. 2.40 171.58 195.27
171.58 195.27
2.04 Other Long Term Liabilities
Derivative Liability 378.61 -
378.61 -
1. Working capital loans from SBI, Andhra Bank, Corporation Bank, IDBI,ICICI and The South Indian Bank are secured by way of pari passu first charge on current assets of the company and pari passu second charge on entire immovable assets of the company.
2. In respect of the above, working capital rupee loans carry interest ranging from 10.45% p.a. to 12.50% p.a. and working capital foreign currency loans carry interest ranging from 1.50% p.a. to 2.75% p.a. plus applicable LIBOR.
3. Unsecured short term loans from ICICI & IDBI Bank carrry interest @ 9.60% and 9.75% p.a. respectively.
2.07 Trade Payables
2,021.05 1,642.38
2,050.23 1,642.38
Total outstanding dues of micro and small enterprises
Total outstanding dues of creditors other than micro and small enterprises
29.18 -
There are no interest amounts paid / payable to Micro and Small Enterprises. The information in relation to dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company, which has been relied upon by the auditors.
64
2.08 Other Current Liabilitiesa) Current maturities of long-term debt ( Refer note no: 2.03 ) 4,715.37 4,361.04b) Interest accrued but not due on borrowings 38.64 74.81c) Unclaimed dividends 22.60 25.14d) Accrued employee benefits 913.39 706.30e) Derivative liability 138.57 -f) Temporary Over Draft from Banks 6.74 -g) Statutory dues payable 432.42 201.16h) Other Payables * 2,713.34 2,611.28
8,981.07 7,979.73
2.09 Short Term Provisions
a) Provision for employee benefits
Gratuity (Funded) (Refer note no. : 2.40) 84.84 94.83
84.84 94.83
Consolidated Financial Statements
2.10 Fixed Assets ` Lacs
Gross Block
Gross Block
Net Block
Net Block
Depreciation and Amortization
Depreciation and Amortization
As at01.04.2014
As at01.04.2015
As at31.03.2015
As at31.03.2016
As at31.03.2015
As at31.03.2016
Upto31.03.2015
Upto31.03.2016
Upto31.03.2014
Upto31.03.2015
For theYear
For theYear
Adjustedagainstsurplus
Adjustedagainstsurplus
Addition /Adjustments
duringthe year
Addition /Adjustments
duringthe year
DeductionsRetirement
duringthe year*
DeductionsRetirement
duringthe year
Deduction /Adjustments
duringthe year
Deduction /Adjustments
duringthe year
Particulars
Particulars
Tangible Assets
Land 1,157.00 - 35.78 1,121.22 - - - - - 1,121.22
Building 10,000.09 101.49 1.38 10,100.21 2,101.23 271.41 - - 2,372.64 7,727.57
Plant and Equipment 59,059.77 1,028.09 761.96 59,325.90 32,356.39 3,283.20 0.48 482.05 35,158.02 24,167.88
Vehicles 380.36 44.92 23.10 402.17 169.67 32.23 - 21.94 179.96 222.21
Office Furnitures 357.14 2.11 5.30 353.95 130.83 36.49 9.54 1.03 175.83 178.12
Computer 520.66 19.59 0.08 540.17 389.89 45.42 17.86 0.08 453.09 87.08
TOTAL (A) 71,475.02 1,196.20 827.60 71,843.62 35,148.01 3,668.75 27.88 505.10 38,339.54 33,504.08
Intangible Assets
Computer Software 414.37 3.01 - 417.38 294.43 22.74 - - 317.17 100.21
TOTAL (B) 414.37 3.01 - 417.38 294.43 22.74 - - 317.17 100.21
TOTAL (A + B) 71,889.39 1,199.21 827.60 72,261.00 35,442.44 3,691.49 27.88 505.10 38,656.71 33,604.29
Tangible Assets
Land 1,121.22 - 56.16 1,065.06 - - - - - 1,065.06
Building 10,100.21 41.17 7.31 10,134.07 2,372.64 274.29 - 1.29 2,645.64 7,488.43
Plant and Equipment 59,325.90 2,234.18 2,441.47 59,118.61 35,158.02 3,394.34 - 1,794.17 36,758.19 22,360.42
Vehicles 402.17 - - 402.17 179.96 31.07 - - 211.03 191.14
Office Furnitures 353.95 6.38 - 360.32 175.83 33.36 - - 209.19 151.14
Computer 540.17 12.50 - 552.67 453.09 42.28 - - 495.37 57.30
TOTAL (A) 71,843.62 2,294.23 2,504.94 71,632.90 38,339.54 3,775.34 - 1,795.46 40,319.42 31,313.48
Intangible Assets
Computer Software 417.38 14.44 - 431.82 317.17 24.50 - - 341.67 90.14
TOTAL (B) 417.38 14.44 - 431.82 317.17 24.50 - - 341.67 90.14
TOTAL (A + B) 72,261.00 2,308.67 2,504.94 72,064.72 38,656.71 3,799.84 - 1,795.46 40,661.09 31,403.62
As at31.03.2016
Lacs`
As at31.03.2015
Lacs`
* Other Payables include expenses payable and advances from customers.
65
2.11 Non Current Investments
Trade Investments
In Equity Shares - Unquoted, fully paid up at cost
1,00,000 Vantex Limited of 10 each 19.00 19.00
12,06,000 A.P. Gas Power Corporation
Limited of 10 each 1,964.87 1,964.87
2,25,000 Sai Regency Power Corporation
Private Limited of 10 each
(Previous year 2,25,000 shares of 10 each) 22.50 22.50
14,000 OPG Energy Private Limited of
10 each 1.40 1.40
Less: Diminution in the value of investment (475.58) (475.58)
1,532.19 1,532.19
Other Investments
In Equity Shares - Quoted, fully paid up at cost
30,00,000 Pricol Limited of 1 each 102.86 102.86Market value 1,284.00 lacs (Previous year 907.50 lacs)
In Equity Shares - Unquoted, fully paid up at cost
100 Precot Mills Employees Cooperative
Credit Society of 10 each 0.01 0.01
100 Precot Mills Multi purpose stores
of 10 each 0.01 0.01
10,000 Cotton Sourcing Company Limited
shares of 10 each 1.00 1.00
In Government Securities 0.02 0.02
1,636.09 1,636.09
Aggregate amount of quoted investments 102.86 102.86
Market value of Quoted Investments 1,284.00 907.50
Aggregate amount of unquoted
investments (gross) 2,008.81 2,008.81
2.12 Long Term Loans and Advances
Unsecured, considered good
Capital Advances 141.96 72.58
Security Deposits 964.41 1,091.00
MAT Credit Receivable 894.25 894.25
Derivative Asset - 449.58
Tax Payments Pending Adjustments 472.87 574.72
Prepaid expenses 6.91 7.46
2,480.40 3,089.59
2.13 Inventories
Raw Materials and components
(Includes Goods in transit Nil
PY 382.79 lacs) 7,854.40 5,662.84
Work-in-progress 1,495.92 1,388.33
Finished goods 2,866.16 2,018.62
Waste Cotton 70.99 173.99
Stores and spares 555.02 515.37
12,842.49 9,759.15
`
`
`
`
`
`
` `
`
`
`
`
As at As at31.03.2016 31.03.2015
Lacs Lacs` `
As at As at31.03.2016 31.03.2015
Lacs Lacs` `
2.15 Cash and Bank Balances
a) Balances with banks
In current accounts 219.57 281.02
In deposit accounts 19.20 -
In unclaimed dividend accounts 22.60 25.14
b) Cash on hand 4.51 3.40
265.88 309.56
Of the above, the balances that meet the definition of Cash and Cash equivalents as per AS 3 Cash flow Statement is ` 243.28 lacs (Previous Year 284.42 lacs)
2.16 Short term loans and advances
Unsecured, considered good
Balance with Government authorities 230.97 310.76
Advance to Trade Suppliers 267.39 317.85
Prepaid expenses 286.57 309.13
Staff advances 60.01 61.91
Other advances 18.44 27.28
863.38 1,026.92
2.17 Other Current Assets
Unsecured considered doubtful
Subsidy receivable from Government 2,136.11 190.93
Less: Provision for doubtful receivables 2,136.11 - 190.93 -
Unsecured considered good
Subsidy receivable from Government(Refer note no. 2.34) 220.04 3,271.89
Export incentives receivable 152.64 337.68
Income accrued 74.32 92.64
447.00 3,702.21
2.18 Revenue from Operations
A. Sale of Products - Manufactured Goods
Sale of Yarn 56,539.11 65,854.38
Sale of Technical Textile products 4,901.51 2,779.49
Sale of Fabrics 2,156.62 -
Sale of Products - Traded Goods
Sale of Yarn & Cotton 2,379.49 2,859.48
Total - A 65,976.73 71,493.35
B. Other operating revenue
Scrap Sales 659.49 1,609.38
Export Incentive 539.12 581.48
Processing Income 1,160.62 978.32
Others 32.64 32.31
Total - B 2,391.87 3,201.49
Total (A + B) 68,368.60 74,694.84
Consolidated Financial Statements
2.14 Trade Receivables
Over six months
i. Unsecured, considered good 28.66 40.36
ii. Unsecured, considered doubtful 27.66 -
Less: Provision for bad & doubtful debts 27.66 -- -
Others : Unsecured, considered good 4,647.68 4,024.65
4,676.34 4,065.01
66
2.19 Other Income
Interest Income 141.26 99.04
Dividend from long term Investments - 12.00
Profit on sale of assets (net) 871.57 78.68
Insurance claim receipts 54.15 10.76
Miscelleneous Income 32.57 48.14
1,099.55 248.62
2.20 Cost of materials consumed :
Cotton 36,380.27 42,174.79
36,380.27 42,174.79
2.21 Changes in inventories of finished
goods and work-in-progress
Inventory at the end of the year
Work in Progress and Waste Cotton 1,566.91 1,562.33
Finished Goods 2,866.16 2,018.62
Total 4,433.07 3,580.95
Inventory at the beginning of the year
Work in Progress and Waste Cotton 1,562.33 3,361.33
Finished Goods 2,018.62 1,958.83
Total 3,580.95 5,320.16
(Increase)/decrease in Inventories (852.12) 1,739.21
2.22 Employee benefits expense
Salaries, Wages and Bonus 6,746.82 6,500.03
Contributions to Provident fund
and other funds 527.93 523.01
Staff welfare expenses 539.05 557.11
7,813.80 7,580.15
2.23 Finance Cost
Interest expense 3,664.01 3,280.80
Other borrowing costs 100.95 81.61
3,764.96 3,362.41
2.24 Depreciation and Amortization
Depreciation - Refer note no. : 2.10 3,775.35 3,668.76
Amortization of Intangible asset 24.50 22.73
- Refer note no. : 2.10
3,799.85 3,691.49
2015 - 16 2014 - 15 Lacs Lacs` `
2.25 Other Expenses
Consumption of Stores & Spares 2,709.28 2,189.53
Power & Utilities (net) Refer note no. 2.32 8,781.50 8,538.35
Processing Charges 302.86 139.26
Repairs and maintenance
Machinery 2,646.36 2,806.42
Building 330.11 488.40
Others 150.11 155.20
Rent, Rates and Taxes 37.72 58.88
Foreign Exchange loss (net) Refer note no. 2.38 1,155.17 157.86
Selling & Distribution expenses 2,943.14 2,913.87
Bank Charges 142.16 98.28
Communication Expenses 70.37 68.05
Travelling Expenses 100.15 113.87
Professional Charges 104.27 66.92
Auditors’ Remuneration 16.31 15.78
Other Administrative expenses 354.00 374.18
Provision for doubtful receivable/advance 26.32 190.93
19,869.83 18,375.78
Payments to the auditor as
a) Auditor
- For Statutory Audit 8.61 7.71
- For Tax Audit 1.25 1.40
- For VAT Audit 1.50 1.50
b) For Certification services 1.64 0.95
c) For others 0.25 1.60
c) For reimbursement of expenses 1.03 1.08
d) Service Tax 2.03 1.55
16.31 15.78
2.26 Earnings per share
Net Profit/(Loss) after tax as per
Statement of Profit and Loss
attributable to Equity Shareholders (5,552.03) (3,263.91)
Weighted Average number of equity
shares used as denominator for
calculating EPS 1,20,00,000 1,20,00,000
Basic & Diluted Earnings / (Loss)
per share (in `) (46.27) (27.20)
Face Value per equity share (in `) 10.00 10.00
2015 - 16 2014 - 15 Lacs Lacs` `
2015 - 16 2014 - 15 Lacs Lacs` `
Imported 0.00% 1.26 2.17% 916.77
Indigenous 100.00% 36,379.01 97.83% 41,258.01
100.00% 36,380.27 100.00% 42,174.79
Consolidated Financial Statements
Particulars of materials
consumed% of
consumption
67
Consolidated Financial Statements
2.27 Estimated amount of contracts
remaining to be executed on capital
account and not provided for 35.29 321.27
2.28 Contingent liabilities in respect of :
Bills discounted 2,032.52 1,939.66
Guarantees 300.38 288.00
Letters of credit outstanding 60.30 -
2.29 a. Disputed Statutory Liabilities
not provided for (excluding 1,317.23 2,434.46
interest & penalty, if any)
b. Disputed Other Liabilities
not provided for (excluding 59.74 59.74
interest & penalty, if any)
2.30 Earnings in Foreign Exchange :
Export of Goods - FOB Value 21,388.68 21,907.68
2.31 Expenditure in Foreign Currency
a. CIF Value of Imports :
i. Raw Materials - 844.15
ii. Components and Spares 301.14 213.89
iii. Capital Goods 186.14 491.10
b. Export Commission 185.20 201.12
c. Quality Claim 16.91 5.72
d. Interest 170.99 148.62
e. Others 24.05 11.64
884.44 1,916.23
31.03.2016 31.03.2015 Lacs Lacs` ` 2.32
478.66 lacs) representing power supplied to the grid against which
equivalent consumption was made in house.
2.33 The Ministry of Corporate Affairs, through its notification dated March
31,2009 has relaxed the provisions of Accounting Standard (AS) 11
The Effects of Changes in Foreign Exchange Rates for treating the
exchange gain/loss arising on restatement of long term foreign currency
monetary items. Accordingly, companies are permitted to adjust in their
carrying cost of depreciable assets, the exchange differences arising
out of exchange rate fluctuations with corresponding adjustments in
Statement of Profit & Loss and general reserve in order to give effect to
the aforesaid amendment, companies are required to exercise their
option. The company has exercised the option and the following
adjustments have been made.
Power and utilities is net of wind power of 348.72 lacs (previous year`
`
2.34 Subsidy receivable from government (net of provisons) represents
145.04 lacs (previous year Rs.2051.08 lacs) of interest subsidy on
TUF scheme loans and Rs.75 lacs (previos year 75 lacs) of grant
receivable for reimbursement of expenditure from Karnataka
Government.
2.35 Net Deferred tax asset has not been recognised considering prudence.
`
`
a. Exchange difference capitalized
during the year 20.25 33.10
b. Depreciation charged toStatement of Profit & loss thereon 208.55 212.15
c. Remaining amount to be amortized* 453.70 662.25
* The Company amortizes only 95% of the value of its fixed assets
As at31.03.2016
As at31.03.2015
2.36 a) Details of foreign currency exposure that are hedged by derivative instruments or otherwise :
Amount of ForeignCurrency in Lacs
Equivalent amount ofRs. in Lacs
68
b) Details of foreign currency exposure that are not hedged by derivative instruments or otherwise :
Trade Payables USD 0.04 - 2.55 -
EURO 0.02 - 1.86 -
Trade Receivables USD 12.46 12.74 825.46 796.05
EURO 7.62 2.63 574.29 176.87
GBP 0.25 0.28 22.89 25.70
PCFC USD 72.77 102.15 4820.76 6384.53
EURO 13.01 1.68 980.78 112.73
ECB USD - 9.45 - 590.63
Derivatives EURO 111.94 126.64 8437.18 8510.42
Receivable covered by USD - 5.38 - 335.97
Forward Contract EURO - 4.37 - 293.46
ParticularsForeign
Currency
2015-16 2014-15 2015-16 2014-15
2.37 Exceptional item represents :
a) Provision for TUF Interest receivable - 1945.18 lacs
(previous year Nil)
b) Profit on sale of long term investment - Nil (Previous year
1014.06 lacs)
c) Impact on account of discontinuation of AS 30 & 32 - Nil
(Previous year - 458.57 lacs)
2.38 Foreign Exchange loss (net) includes foreign exchange loss arising
out of restatement of foreign currency assets / liabilities / derivatives
amounting to 992.53 lacs (previous year - 150.68 lacs)
2.39 Related Party Disclosure :
List of related parties with whom transactions have taken place
Key Management Personnel (KMP) : Mr. D Sarath Chandran,
Mr. Ashwin Chandran and Mr. Prashanth Chandran.
Others : Pricol Limited, Pricol Packaging Limited, Premier Spinning &
Weaving Mills Pvt Ltd and Mr. Vijay Mohan.
`
`
`
` `
FY 2015-16
KMP Others
FY 2014-15
KMP Others
Lacs`
Nature of Transactions
Commission on Exports - - - -
Dividend Received - - - 11.16
Advance for Expense - - - -
Remuneration 167.90 - 152.64 -
Purchase of spares - 0.21 - 0.10
Purchase of packingmaterials - - - 0.24
Purchase of waste - 44.74 - -
Sale of Yarn - 92.26 - 75.21
Sitting Fees - 0.60 - 0.60
2.40 Disclosure report under AS15 (Revised 2005)
I. Principal Actuarial Assumptions
[Expressed as weighted averages]
Discount Rate 7.88% 7.84%
Salary escalation rate 3.00% 3.00%
Attrition rate 2.00% 2.00%
Expected rate of return on plan Assets 8.25% 8.25%
II. Changes in the present value of the obligation -
Reconciliation of opening and closing balances :
Present value of the obligation as at the beginning of the period 1378.25 1229.97
Interest cost 102.67 92.26
Current service cost 116.15 106.87
Past service cost - (non vested benefits) - -
Past service cost - (vested benefits) - -
Benefits paid (150.79) (106.32)
Actuarial loss / (gain) on obligation (balancing figure) (227.78) 55.47
Present Value of Obligation as at the end of the period 1218.50 1378.25
III. Changes in the fair value of plan assets -
Reconciliation of opening and closing balances :
Fair value of plan assets as at the beginning of the period 1088.15 978.81
Expected return on plan assets 84.57 85.26
Contributions - -
Benefits paid (150.79) (106.32)
Actuarial gain / (loss) on plan assets (balancing figure) (59.85) 130.40
Fair value of plan assets as at the end of the period 962.08 1088.15
IV. Actual return on plan assets
Expected return on plan assets 84.57 85.26
Actuarial gain (loss) on plan assets (59.85) 130.40
Actual return on plan assets 24.72 215.66
31.03.2016
Lacs`
31.03.2015
Lacs`
69
Consolidated Financial Statements
VII. Expense recognised in the statement of profit and loss
Current service cost 116.15 106.87
Interest cost 102.67 92.26
Expected return on plan assets (84.57) (85.26)
Net actuarial (gain)/ loss recognised in the year (167.93) (74.93)
Transitional liability recognised in the year - -
Past service cost-non-vested benefits - -
Past service cost-vested benefits - -
Expenses recognised in the statement of profit and loss (33.68) 38.94
VIII. Movements in the liability recognized in the balance sheet
Opening net liability 290.10 251.16
Expense as above (33.68) 38.94
Contribution paid - -
Closing net liability 256.42 290.10
Consolidated Financial Statements
31.03.2016
Lacs`
31.03.2015
Lacs`
70
X. Major categories of plan assets (as percentage of total plan assets)
Fund managed by Insurer 100.00% 100.00%
Total 100.00% 100.00%
XI. Enterprise's Best Estimate of Contribution during Next Year NA NA
IX. Amount for the current period 31.3.2016 31.03.2015 31.03.2014 31.03.2013 31.03.2012
Present Value of obligation 1218.50 1378.25 1155.92 1042.24
Plan Assets 962.08 1088.15 926.61 887.94
Surplus / (Deficit) (256.42) (290.10) (229.31) (154.30)
Experience adjustments on plan
liabilities - (Loss)/Gain (223.80) 64.20 (54.95) (91.01)
Experience adjustments on plan assets -
(Loss)/Gain (59.85) 122.65 (0.05) (47.18)
1229.97
978.81
(251.16)
14.18
46.77
V. Actuarial gain / Loss recognized
Actuarial (gain) / loss for the period - Obligation (227.78) 55.47
Acturial gain / (loss) for the period - plan assets (59.85) 130.40
Total (gain) / loss for the period (167.93) (74.93)
Actuarial (gain)/loss recognised in the period (167.93) (74.93)
Unrecognized actuarial (gain) / loss at the end of the year - -
VI. Amounts recognised in the balance sheet and related analysis
Present value of the obligation 1218.50 1378.25
Fair value of plan assets 962.08 1088.15
Difference 256.42 290.10
Unrecognised transitional liability - -
Unrecognised past service cost -non vested benefits - -
Liability recognised in the balance sheet 256.42 290.10
1 Segment Revenue
- Domestic Sales 45,585.44 51,879.68
- Export Sales 22,783.16 22,815.17
Total Revenue 68,368.60 74,694.84
2 Segment Results
- Domestic 1,669.75 300.36
- Export (1,476.75) (1,326.50)
193.00 (1,026.14)
Less : Depreciation
- Domestic - -
- Export 1,557.00 1,462.00
- Unallocated 2,242.85 2,229.49
Total Operating Profit (3,606.85) (4,717.63)
Less : Provision for Tax - 18.91
Exceptional items (1,945.18) 1,472.63
Net Profit / (Loss) (5,552.03) (3,263.90)
3 Segment Assets
- Domestic 3,502.20 6,412.08
- Export 17,074.01 17,098.39
- Unallocated 34,104.97 33,750.87
Total Assets 54,681.18 57,261.34
2.43 Geographical Segment2014-2015 ` in Lacs
2015-16` in Lacs
4 Segment Liabilities
- Domestic - -
- Export 9,687.97 164.94
- Unallocated 37,170.76 43,721.93
Total Liabilities 46,858.73 43,886.88
5 Capital Expenditure
- Domestic - -
- Export 1,273.42 180.81
- Unallocated 1,035.23 1,063.14
6 Depreciation & Amortisation
- Domestic - -
- Export 1,557.00 1,462.00
- Unallocated 2,242.85 2,229.49
Note :
1. The Company has considered geographical segments as its
primary segments which are domestic and export sales. The
operations comprise of only one segment viz Textiles, therefore,
there are no other business segments to be reported under AS-17.
2. As per Accounting Standard on Segment reporting (AS-17),
"Segment Reporting", the company has reported segment
information on consolidated basis including business conducted
through its subsidiaries.
2.44 The amounts and disclosures included in the financial statements of the
previous year have been reclassified wherever necessary to conform to
the current year's classification.
71
2.41 Additional information as required under Schedule III to the Companies Act, 2013 of enterprises consolidated as subsidiary
Parent
Precot Meridian Limited 98.94% 7,739.35 99.98% (5,550.96)
Subsidiaries
Suprem Textiles Processing Ltd 0.02% 1.74 0.01% (0.41)
Multiflora Processing (Coimbatore) Ltd 0.00% (0.04) 0.01% (0.34)
Precot Meridian Energy Ltd 0.00% (0.09) 0.00% (0.33)
Suprem Associates - Firm 1.04% 81.48 0.00% -
Name of the entityNet Assets Share in Profit or loss
As % of consolidatednet assets
Amount( Rs. In Lakhs)
As % of consolidatedprofit or loss
Amount(Rs. In Lakhs)
2.42 Disclosure as required under section 186(4) of the Companies Act, 2013
Loans given and Guarantees given by the company : Nil (Previous year: Nil)
Investments made are given under the respective head.
Consolidated Financial Statements
Vide our report of even date attachedFor Haribhakti & Co. LLPChartered Accountants
Firm Reg.No.: 103523WC S SathyanarayananPartnerM.No. : 028328Place : CoimbatoreDate : 28-May-2016
ICAI
D Sarath ChandranChairman
(DIN : 00001885)
Ashwin ChandranVice Chairman and Managing Director
(DIN : 00001884)
M R Siva ShankarChief Financial Officer
R Nithya PrabhuCompany Secretary
For and on behalf of the directors
Consolidated Cash Flow Statement
A. Cash Flow from Operating Activities
Adjustments for :
Depreciation
Net Profit Before Tax and Extraordinary Items (3,606.85) (4,717.63)
3,799.85 3,691.49
(Profit)/Loss on Sale of Assets (871.57) (78.68)
Exceptional items (1,945.18) 458.57
Investment Income - Dividend - (12.00)
Interest Income (141.26) (99.04)
Interest Payment 3,764.96 3,362.41
Foreign Currency Translation Reserve - (79.81)
Minority Interest - (64.77)
4,606.80 7,178.17
Operating Profit before working capital changes 999.95 2,460.54
Adjustments for :
Trade Receivabes (611.34) 279.43
Other Receivables 3,907.79 (1,479.74)
Inventories (3,083.33) 8,906.41
Trade Payables 1,438.48 (1,047.01)
1,651.59 6,659.09
Cash generated from Operations 2,651.54 9,119.63
Direct Taxes paid / Refunds 101.84 (43.82)
Net Cash Flow from operating activities 2,753.38 9,075.80
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets(Including WIP) (2,308.66) (1,243.94)
Sale of Fixed Assets 1,583.58 401.18
(Purchase)/ Sale of Investments - 1,110.53
Proceeds from capital investment subsidy - 700.00
Interest Received 159.59 127.17
Dividend Received - 12.00
Net Cash flow from / (used in) Investing activities (565.49) 1,106.94
C. CASH FLOW FROM FINANCING ACTIVITES
Dividends Paid (Including Dividend Tax) (2.54) (280.59)
Interest Paid (3,801.13) (3,582.65)
Repayment of Long Term Borrowings (1,992.25) (1,317.43)
Proceeds / (Repayments) of Unsecured Loan 2,909.21 (2,527.43)
Proceeds / (Repayments) of working capital borrowings 655.13 (2,648.05)
Net Cash Flow used in Financing Activities (2,231.58) (10,356.15)
Net Increase/Decrease in Cash and Cash Equivalent (43.68) (173.41)
Cash and Bank Balances as at
1.4.2015 and 1.4.2014 (Opening balance) 309.56 482.97
Less: Bank balances not considered as cash and cash equivalents
as per Accounting Standard 3 22.60 25.14
Cash and Cash Equivalents as at
31.03.16 and 31.3.2015 (Closing balance) 243.28 284.42
31.03.2015 Lacs`
31.03.2016 Lacs`
72
Significant Accounting Policies and Notes on Financial Statements 1 & 2.01 to 2.44The accompanying notes form an integral part of financial statements
Vide our report of even date attachedFor Haribhakti & Co. LLPChartered Accountants
Firm Reg.No.: 103523WC S SathyanarayananPartnerM.No. : 028328Place : CoimbatoreDate : 28-May-2016
ICAI D Sarath Chandran
Chairman(DIN : 00001885)
Ashwin ChandranVice Chairman and Managing Director
(DIN : 00001884)
M R Siva ShankarChief Financial Officer
R Nithya PrabhuCompany Secretary
For and on behalf of the directors
Form AOC - I
(Pursuant to first proviso to sub-section (3) of section 129 read with
rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries
/ associate companies / joint ventures
Part "A": Subsidiaries
(Information in respect of each subsidiary to be presented with amounts in ` Lakhs)
S.
No.Particulars
1. Name of the subsidiary Suprem Textiles Precot Meridian Multiflora Processing
Processing Limited Energy Limited (Coimbatore) Limited
st st st2. Reporting period for the subsidiary concerned, 1 April , 2015 to 1 April , 2015 to 1 April , 2015 to
st st stif different from the holding company s 31 March, 2016 31 March, 2016 31 March, 2016
reporting period
3. Reporting currency and Exchange rate as
on the last date of the relevant Financial INR INR INR
year in the case of foreign subsidiaries
4. Share capital 100.00 5.00 25.00
5. Reserves & surplus (67.98) (26.92) 3.34
6. Total assets 33.08 0.05 29.39
7. Total Liabilities 33.08 0.05 29.39
8. Investments 1.98 - -
9. Turnover - - -
10. Profit before taxation 0.41 (0.33) (0.34)
11. Provision for taxation - - -
12. Profit after taxation 0.41 (0.33) (0.34)
13. Proposed Dividend - - -
14. % of shareholding 100% 100% 100%
Part "B": Associates and Joint Ventures
Statement pursuant to section 129 (3) of the Companies Act, 2013 related
to associate companies and joint ventures
Not Applicable
73
D Sarath ChandranChairman(DIN : 00001885)
Ashwin ChandranVice Chairman and Managing Director(DIN : 00001884)
M R Siva ShankarChief Financial Officer
R Nithya PrabhuCompany Secretary
For and on behalf of the directors
thNotice is hereby given that the 54 Annual General
Meeting of the shareholders of the company will be nd
held on, Friday, 02 September 2016 at 4.30 PM at
Chamber Hall, Chamber Towers, 8/732, Avinashi
Road, Coimbatore 641 018, to transact the following
business.
Ordinary Business:
1. Adoption of financial statements
To consider and if thought fit, to pass with or
without modification, the following resolution as
an ordinary resolution:
Resolved that the financial statements of the
company for the year ended 31-Mar-2016
including audited balance sheet as at
31-Mar-2016, statement of profit and loss, cash
flow statement and consolidated financial
statements for the year ended on that date,
together with the directors' report and the
auditors' report thereon as presented to the
meeting, be and are hereby, approved and
adopted.
2. To appoint a director in place of Mr Ashwin
Chandran (DIN: 00001884), who retires by
rotation and being eligible, seeks re-appointment
To consider and if thought fit, to pass with or
without modification, the following resolution as
an ordinary resolution:
Resolved that pursuant to the provisions of
section 152 read with schedule IV and other
applicable provisions, if any, of the Companies
Act, 2013, approval of the members of the
company, be and is hereby accorded to the re-
appointment of Mr Ashwin Chandran (DIN:
00001884) as a director.
3. Ratification of appointment of statutory auditors
To consider and if thought fit, to pass with or
without modification, the following resolution as
an ordinary resolution:
Resolved that pursuant to section 139, 142 and
other applicable provisions of the Companies Act,
2013, and the rules made thereunder, as
amended from time to time, pursuant to the
recommendations of the audit committee and the
board of directors, and pursuant to the resolution
passed by the members at the AGM held on
28-Aug-2015, the appointment of M/s. Haribhakti
& Co LLP, Chartered Accountants (Firm
Registration No. 103523W) as the auditors of the
company to hold office till the conclusion of the th
58 AGM to be held in the year 2020, be and is
hereby ratified and that the board of directors be
and is hereby authorised to fix the remuneration
payable to them in consultation with the auditors.
Special Business:
4. Ratification of remuneration payable to cost
auditor
To consider and if thought fit, to pass with or
without modification, the following resolution as
an ordinary resolution :
Resolved that pursuant to the provisions of
section 148 and other applicable provisions, if
any, of the Companies Act, 2013, read with the
Companies (Audit and Auditors) Rules, 2014
(including any statutory modification(s) or re-
enactment thereof, for the time being in force), Mr
R Krishnan, Cost Accountant (Associate regn.
no. 7799) appointed as the cost auditor of the
company for audit of the cost accounting records
of the company for the financial year ending 31-
Mar-2017, be paid remuneration of Rs. 2.75 lacs
plus service tax as applicable.
Resolved further that the board of directors of the
company, be and is hereby authorised to do all
acts and take all such steps as may be necessary,
proper or expedient to give effect to this
resolution.
By order of the board
R Nithya Prabhu
Company Secretary
Coimbatore28-May-2016
Notice to the Members
74
NOTES:
1. A member entitled to attend and vote at the
meeting is entitled to appoint a proxy to
attend and vote on a poll instead of himself
and the proxy need not be a member of the
company. The instrument appointing the proxy
should, however, be deposited at the registered
office of the company not less than forty-eight
hours before the commencement of the meeting.
A person can act as a proxy on behalf of members
not exceeding fifty and holding in the aggregate
not more than ten percent of the total share
capital of the company carrying voting rights. A
member holding more than ten percent of the
total share capital of the company carrying voting
rights may appoint a single person as proxy and
such person shall not act as a proxy for any other
person or shareholder.
2. The register of members and share transfer
books of the company will remain closed from
26-Aug-2016 to 02-Sep-2016 (both days
inclusive).
3. The explanatory statement pursuant to section
102 of the Act, with respect to material facts
concerning the business under item no. 4 of the
notice, is annexed hereto. The relevant details as
requried under regulation 36 (3) of the Listing
regulations, of the person seeking re-
appointment as director under item no. 2 of the
notice, is also annexed.
4. Pursuant to the provisions of section 205 A (5) of
the Companies Act, 1956, dividends remaining
unclaimed for a period of seven years from the
date they became due for payment are required
to be transferred to the Investor Education and
Protection Fund (IEPF) established by the
Central Government in accordance with the
provisions of section 205C of the Companies
Act, 1956. Pursuant to the provisions of Investor
Education and Protection Fund (Uploading of
information regarding unpaid and unclaimed
amounts lying with companies) Rules, 2012, the
company has uploaded the details of unpaid and
unclaimed amounts lying with the company as on
28-Aug-2015 (date of last Annual General
Meeting) on the website of the company
http://www.precot.com/investor-relations/,as
also on the website of the Ministry of Corporate
Affairs. Members who have not encashed their
dividend pertaining to the year 2009-10 and/or
any subsequent years that still remains
outstanding should approach the company or
Link Intime India Private Limited, the registrar and
share transfer agent, for obtaining payments
thereof.
In terms of section 205C of the Companies Act,
1956, the shareholders are requested to note that
no claim shall be entertained either with IEPF or
against the company in respect of dividend
amounts unclaimed for a period of seven years
from the dates they first became due for payment
and transferred to the IEPF. During the year, the
company has transferred unclaimed dividend for
the financial year 2007-08 to the IEPF.
5. Members holding shares in physical form are
requested to intimate, indicating their folio
number, the changes, if any, in their registered
addresses, either to the company or its registrar
and share transfer agent or to their respective
depository participant, in case the shares are
held in dematerialized form.
6. Members who are holding shares in electronic
form are requested to intimate immediately their
change of address / change of bank account, if
any to their respective depository participant.
7. Members who hold shares in physical form in
multiple accounts in identical names or joint
accounts in the same order of names are
requested to send the share certificates to the
company's registrar and share transfer agent for
consolidation into a single account.
8. The notice of the AGM along with the annual
report 2015-16 is being sent by electronic mode
to those members whose e-mail addresses are
registered with the company/depositories, unless
any member has requested for a physical copy of
the same. For members who have not registered
their e-mail addresses, physical copies are being
sent by the permitted mode.
9. To support the Green Initiative , the members
who have not registered their e-mail addresses
Notice to the Members
75
are requested to register the same with the
registrar and share transfer agent/ depositories.
10. Members may note that the notice of the AGM
along with the annual report 2015-16 will be
available on the website of the company
http://www.precot.com/investor-relations/. The
physical copies of the documents will also be
available at the company's registered office for
inspection during normal business hours on
working days.
11. The attendance slip and proxy form are being
sent with this annual report.
12. In compliance with section 108 of the Companies
Act, 2013, rule 20 of the Companies (Manage-
ment and Administration) amendment rules,
2015, and regulation 44 of the Listing regulations,
the company has provided a facility to the
members to exercise their votes electronically
through the electronic voting service facility
arranged by Central Depository Services (India)
Limited (CDSL). The facility for voting, through
ballot paper, will also be made available at the
AGM venue and the members attending the AGM
who have not already cast their votes by remote
e-voting shall be able to exercise their right at the
AGM through ballot paper.
Members who have cast their votes by remote e-
voting prior to the AGM may attend the AGM but
shall not be entitled to cast their votes again.
Mr Gouri Shanker Mishra, Practising Company
Secretary (FCS No. 6906) has been appointed as
the scrutinizer to scrutinize the voting and remote
e-voting process in a fair and transparent
manner.
The instructions for shareholders voting
electronically are as under:
i) The voting period begins at 10.00 AM on
30-Aug-2016 and ends at 5.00 PM on
01-Sep-2016. Dur ing th is per iod
shareholders of the company, holding
shares either in physical form or in
dematerialized form, as on the cut-off date
26-Aug-2016, may cast their vote
electronically. The e-voting module shall be
disabled by CDSL for voting thereafter.
ii) The shareholders should log on to the
e-voting website www.evotingindia.com.
iii) Click on Shareholders .
iv) Now enter your User ID
a. For CDSL: 16 digits beneficiary ID
b. For NSDL: 8 Character DP ID followed
by 8 Digits Client ID
c. Members holding shares in physical
form should enter folio number
registered with the company.
v) Next enter the image verification as
displayed and click on login.
vi) If you are holding shares in demat form and
had logged on to www.evotingindia.com and
voted on an earlier voting of any company,
then your existing password is to be used.
vii) If you are a first time user follow the steps
given below:
For members holding shares in demat form
and physical form
Enter your 10 digit alpha-numeric PAN issued
by Income Tax Department (Applicable for both
demat shareholders as well as physical
shareholders)
Note :
Members who have not updated their PAN with
the company / depository participant are
requested to use the sequence number which is
printed on attendance slip, in the PAN field.
Enter the date of birth as recorded in your
demat account or in the company records for
the said demat account or folio in dd/mm/yyyy
format.
Enter the dividend bank details as recorded in
your demat account or in the company records
for the said demat account or folio.
Note :
Please enter the DOB or dividend bank
details in order to login. If the details are not
recorded with the depository or company,
please enter the member id / folio number in the
dividend bank details field as mentioned in
instruction (iv).
Dividend
Bank
Details
PAN
DOB
Notice to the Members
76
viii) After entering these details appropriately,
click on "SUBMIT" tab.
ix) Members holding shares in physical form
will then directly reach the company
selection screen. However, members
holding shares in demat form will now reach
'Password Creation' menu wherein they are
required to mandatorily enter their login
password in the new password field. Kindly
note that this password is to be also used by
the demat holders for voting for resolutions
of any other company on which they are
eligible to vote, provided that company opts
for e-voting through CDSL platform. It is
strongly recommended not to share your
password with any other person and take
utmost care to keep your password
confidential.
x) For members holding shares in physical
form, the details can be used only for
e-voting on the resolutions contained in this
notice.
xi) Click on the EVSN for the relevant Precot
Meridian Limited on which you choose to
vote.
xii) On the voting page, you will see
"RESOLUTION DESCRIPTION" and
against the same the option "YES/NO" for
voting. Select the option YES or NO as
desired. The option YES implies that you
assent to the resolution and option NO
implies that you dissent to the resolution.
xiii) Click on the "RESOLUTIONS FILE LINK" if
you wish to view the entire resolution
details.
xiv) After selecting the resolution you have
decided to vote on, click on "SUBMIT". A
confirmation box will be displayed. If you
wish to confirm your vote, click on "OK", else
to change your vote, click on "CANCEL" and
accordingly modify your vote.
xv) Once you "CONFIRM" your vote on the
resolution, you will not be allowed to modify
your vote.
xvi) You can also take a print of the voting done
by you by clicking on "Click here to print"
option on the voting page.
xvii) If demat account holder has forgotten the
password then enter the User ID and the
image verification code and click on Forgot
Password and enter the details as
prompted by the system.
Shareholders can also cast their vote using CDSL s
mobile app m-voting available for android based
mobiles. The m-voting app can be downloaded from
google play store. iphone and windows phone users
can download the app from the APP store and the
windows phone store respectively. Please follow the
instructions as prompted by the mobile app while
voting on your mobile.
Note for non - individual shareholders and custodians
v Non-individual shareholders (i.e. other than
ind iv idua ls , HUF, NRI e tc . ) and
custodian are required to log on to
www.evotingindia.com and register
themselves as corporates.
v A scanned copy of the registration form
bearing the stamp and sign of the
e n t i t y s h o u l d b e e m a i l e d t o
v After receiving the login details a
compliance user should be created using
the admin login and password. The
compliance user would be able to link the
account(s) for which they wish to vote on.
v The list of accounts should be mailed to
[email protected] and on
approval of the accounts they would be able
to cast their vote.
v A scanned copy of the board resolution and
power of attorney (POA) which they have
issued in favour of the custodian, if any,
should be uploaded in PDF format in the
system for the scrutinizer to verify the same.
In case you have any queries or issues regarding e-
voting, you may refer the Frequently Asked Questions
("FAQs") and e-voting manual available at
www.evotingindia.com, under help section or write an
email to [email protected].
Notice to the Members
By order of the board
R Nithya Prabhu
Company Secretary
77
Coimbatore28-May-2016
Details of director seeking re-appointment at the annual general meeting :
Information as required under regulation 36 (3) of the listing regulations:
The information relating to the directors proposed to be appointed is given hereunder.
Name : Mr Ashwin Chandran
Age : 40 years
Qualifications : B Sc (Hons), MBA
Expertise : More than 19 years of experience in textile industry
Number of shares held : 23,07,457
Director of company since : 2003
Relationship with other directors : Mr Ashwin Chandran is the son of Mr Sarath Chandran and brotherof Mr Prashanth Chandran
Directorships :
Name of company Member of committees
Precot Meridian Limited Stakeholders Relationship Committee
Precot Meridian Energy Limited -
Multiflora Processing Coimbatore Limited -
Suprem Textile Processing Limited -
For other details, please refer to the corporate governance report attached to the director s report.
Notice to the Members
78
Explanatory Statement
(pursuant to section 102 of the Act.)
Item 4
The board, on the recommendation of the audit committee, has approved the appointment and remuneration of
the cost auditor to conduct the audit of the cost records of the company for the financial year ending 31-Mar-2017.
In accordance with the provisions of section 148 of the Act read with the Companies (Audit and Auditors)
Rules, 2014, the remuneration payable to the cost auditors has to be ratified by the members of the company.
Accordingly, the consent of the members is sought for passing an ordinary resolution as set out at item no. 4 of the
notice, for ratification of the remuneration payable to the cost auditor for the financial year ending 31-Mar-2017.
None of the directors or Key Managerial Personnel of the company or their relatives, is concerned or interested, in
the resolution set out at item no. 4.
Coimbatore28-May-2016
By order of the board
R Nithya Prabhu
Company Secretary
Corporate Identification Number (CIN): L17111TZ1962PLC001183
Registered Office :
SUPREM, PB 7161,
Green Fields, Puliakulam Road, Coimbatore -641045
Tamil Nadu, India
Phone : 0422-4321100; Fax : 0422-4321200
Email : [email protected], Website : www.precot.com
Land Mark : Near GD Naidu Museum
Route map to the venue of the AGM
AGM Venue: The Chamber Hall, Chamber Towers, No.8/732, Avinashi Road, Coimbatore - 641 018
Notes :
Kala
ikath
ir
04
22
22
23
45
4
(CIN: L17111TZ1962PLC001183)
SUPREM, No. 737, Green fields, Puliakulam Road, Coimbatore - 641045.
Tel: 0422-4321100 Fax: 0422-4321200
Email: [email protected], Website: www.Precot.com
Name of the member(s)Registered address
I/We, being the member(s) holding ........................................... shares of the above named company, hereby appoint:
1) Name :...........................................................................................................................................................................................
Address...........................................................................................................................................................................................
Email ID :...................................................................... Signature ..................................................................... or failing him/her
2) Name :...........................................................................................................................................................................................
Address :...........................................................................................................................................................................................
Email ID :...................................................................... Signature ..................................................................... or failing him/her
3) Name :...........................................................................................................................................................................................
Address :...........................................................................................................................................................................................
Email ID :...................................................................... Signature .....................................................................
P.T.O.
Form No. MGT - 11
Proxy Form[Pursuant to section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]
I hereby record my presence at 54th Annual General Meeting of the Company being held on Friday 2nd September 2016at 04.30 PM Chamber Hall, Chamber Towers, 8/732, Avinashi Road, Coimbatore-641018, Tamil Nadu
Signature of Member / Proxy*
✄ Cut here
✄ Cut here
Electronic Voting Particulars
* Strike out whichever is not applicable
* Those who have not registered their PAN may use Default PAN
EVSN(Electronic Voting Sequence Number)
160718017
* Default PAN / Sequence No
If desirous of E-voting, please read the instructions given in the AGM Notice before exercising
Precot Meridian Limited(CIN: L17111TZ1962PLC001183)
Regd. Office: SUPREM, PB 7161, Green Fields,Puliakulam Road, Coimbatore -641045, Tamil Nadu, IndiaEmail: [email protected] Website: www.precot.com
Ph: 0422-4321100; Fax: 0422-4321200
Precot Meridian Limited(CIN: L17111TZ1962PLC001183)
Regd. Office: SUPREM, PB 7161, Green Fields,Puliakulam Road, Coimbatore - 641045, Tamil Nadu, IndiaEmail: [email protected] Website: www.precot.com
Ph: 0422-4321100; Fax: 0422-4321200
Attendance Slip
Folio No. / Demat ID : No. of shares held :
Name of the shareholder :
Folio No. / Demat ID
Resolution
NumberResolution
Ordinary Business
1
2
3
Approval of financial statements for the year ended 31st March, 2016, the report of the board of
directors and the report of the auditors thereon.
Reappointment of Mr. Ashwin Chandran (DIN 00001884), who retires by rotation, as a director.
Appointment of Statutory Auditors
Special Business
Ratification of remuneration payable to Cost Auditor Mr. R. Krishnan for the financial year 2016-17.4
as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 54th Annual General Meeting
of the Company, to be held on Friday, the 2nd September, 2016 at 4.30 PM IST, at Chamber Hall, Chamber
Towers, 8/732, Avinashi Road, Coimbatore-641018, Tamil Nadu and at any adjournment thereof in respect of
such resolutions as are indicated:
Signed this ………………. day of ………………. 2016
Signature of shareholder : ………………………………….................................
Signature of proxy holder (s) : ………………………………….................................
Note :
1. This form of proxy, in order to be effective, should be duly stamped, completed, signed and deposited at theregistered office of the company, not less than 48 hours before the commencement of the meeting.
2. Those members who have multiple folios with different joint holders may use copies of this attendance slip / proxy
Affix ` 1/-Revenue
Stamp